record of amendments to the articles of association...
TRANSCRIPT
Articles of Association
of
Ping An Insurance (Group) Company of China, Ltd.
(A joint stock limited company incorporated in the People’s Republic of China
with limited liability)
(These Articles of Association are prepared in accordance with the “Articles of
Association of Companies Seeking a Listing outside the PRC Prerequisite Clauses”
(“Prerequisite Clauses”), “Reply on Opinions Concerning the Supplement and
Amendment to the Articles of Association by Companies to be Listed in Hong Kong”
(Zheng Jian Hai Han [1995] No. 1) (“Zheng Jian Hai Han”), “Opinions
Concerning the Further Promoting of the Standard Operation and the Deepening
of Reform of the Company Listed outside the PRC” (“Opinions”), “Guidelines for
Articles of Association of Insurance Companies”, “Guidelines for Articles of
Association of Listed Companies” (“Guidelines”), the Rules Governing Listing of
Stocks on Shanghai Stock Exchange (“SSE Listing Rules”) and the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
(“Stock Exchange Listing Rules”).
These Articles are written in Chinese. If there is any discrepancy between this
version and another version in different language or in other forms, the Chinese
version which has acquired the latest approval by and registered with the State
Administration for Industry and Commerce shall prevail.
Record of Amendments to the Articles of Association of
Ping An Insurance (Group) Company of China, Ltd.
No. Formulati
on
Amendment
date Name of the meeting
Document of
approval Notes
1 First edition February 1988 Signed by the founding shareholders of the
Company Yin Fu [1988]
No.113
2 1st
Amendment
May 25,
1989 The third meeting of the first session of the Board Yin Fu [1991]
No.89
3 2nd
Amendment
April 30, 1996 The first general meeting Yin Fu [1996]
No.157
4 3rd
Amendment
August 9, 2001 The extraordinary general meeting for 2001 Bao Jian Bian
[2001] No.62
Shen
5 4th
Amendment
January 20,
2002
The first extraordinary general meeting
for 2002
Bao Jian Bian
[2002] No.98
Shen
6 5th
Amendment
October 8, 2002 The second extraordinary general meeting for
2002
Bao Jian Bian
[2003] No.8
Shen
7 6th
Amendment
September 10,
2003
The first extraordinary general meeting
for 2003
Bao Jian Bian
[2003] No.142
Shen
8 7th
Amendment
March 9, 2004 The first extraordinary general meeting
for 2004 Bao Jian Fa Gai
[2004] No.544
9 8th
Amendment
June 11, 2004 Resolution approved by the Board Committee
authorized by the Board and the shareholders in
general meeting
Bao Jian Fa Gai
[2005] No.10
10 9th
Amendment
June 23, 2005 2005 annual general meeting Bao Jian Fa Gai
[2005] No.899
11 10th
Amendment
May 25, 2006 2006 annual general meeting Bao Jian Fa Gai
[2006] No.621
12 11th
Amendment
November 13,
2006 The second extraordinary meeting for 2006 Bao Jian Fa Gai
[2006] No.1359
13 12th
Amendment
June 7, 2007 2006 annual general meeting Bao Jian Fa Gai
[2007] No.1349
14 13th
Amendment
July 17, 2008 The second extraordinary meeting for 2008 Bao Jian Fa Gai
[2010] No.197
15 14th
Amendment
June 3, 2009 2008 annual general meeting Bao Jian Fa Gai
[2010] No.197
16 15th
Amendment
June 29, 2010 2009 annual general meeting Bao Jian Fa Gai
[2010] No.1434
17 16th
Amendment
June 16, 2011 2010 annual general meeting Bao Jian Fa Gai
[2011] No.1597
18 17th
Amendment
June 17, 2011 Proposal for amendments to the articles of
association signed by the Chairman as authorized
by shareholders’ general meeting and the Board
Bao Jian Fa Gai
[2011] No.1597
19 18th
Amendment
September 20,
2012
The second extraordinary general
meeting for 2012
Bao Jian Fa Gai
[2012] No.1255
20 19th
Amendment
June 15, 2015 2014 annual general meeting
Bao Jian Xu Ke
[2016] No.56
21 20th
Amendment
December 17,
2015
The second extraordinary general
meeting for 2015
22 21st
Amendment
March 19, 2018 The first extraordinary general meeting for 2018,
and proposal for amendments to the articles of
association signed by the Chairman as authorized
by shareholders’ general meeting and the Board
Yin Bao Jian Xu
Ke [2018] No.556
23 22nd
Amendment
December 14,
2018
The second extraordinary general
meeting for 2018 Yin Bao Jian Fu
[2019] No.230
Table of Contents
CHAPTER 1: GENERAL PROVISIONS .......................................................................................... 1
CHAPTER 2: PURPOSE AND SCOPE OF BUSINESS ................................................................... 3
CHAPTER 3: SHARES AND REGISTERED CAPITAL ................................................................ 4
CHAPTER 4: INCREASE AND REDUCTION OF CAPITAL AND BUY BACK OF SHARES . 8
CHAPTER 5: FINANCIAL ASSISTANCE FOR THE PURCHASE OF COMPANY SHARES 12
CHAPTER 6: SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS .............. 14
CHAPTER 7: RIGHTS AND OBLIGATIONS OF SHAREHOLDERS ....................................... 18
CHAPTER 8: SHAREHOLDERS’ GENERAL MEETINGS ........................................................ 24
CHAPTER 9: SPECIAL VOTING PROCEDURES FOR SHAREHOLDERS OF DIFFERENT
CLASSES ............................................................................................................................................ 41
CHAPTER 10: BOARD OF DIRECTORS ...................................................................................... 44
CHAPTER 11: SECRETARY OF THE BOARD OF DIRECTORS .............................................. 51
CHAPTER 12: SUPERVISORY COMMITTEE ............................................................................. 52
CHAPTER 13: EXECUTIVE COMMITTEE ................................................................................. 55
CHAPTER 14: QUALIFICATION AND DUTIES OF THE COMPANY’S DIRECTOR,
SUPERVISOR AND OTHER SENIOR MANAGEMENT ............................................................ 58
CHAPTER 15: FINANCIAL AND ACCOUNTING SYSTEMS, DISTRIBUTION AND
AUDITING OF PROFITS ................................................................................................................. 69
CHAPTER 16: BASIC MANAGEMENT SYSTEM OF THE COMPANY .................................. 75
CHAPTER 17: NOTICE AND ANNOUNCEMENT ....................................................................... 75
CHAPTER 18: EMPLOYMENT OF ACCOUNTING FIRM ........................................................ 76
CHAPTER 19: MERGER AND DIVISION OF THE COMPANY ............................................... 79
CHAPTER 20: DISSOLUTION AND LIQUIDATION OF THE COMPANY ............................. 81
CHAPTER 21: SPECIAL MATTERS IN CORPORATE GOVERNANCE ................................. 84
CHAPTER 22: PROCEDURES FOR AMENDING THE COMPANY’S ARTICLES OF
ASSOCIATION .................................................................................................................................. 86
CHAPTER 23: SETTLEMENT OF DISPUTES ............................................................................. 87
CHAPTER 24: SUPPLEMENTARY ................................................................................................ 88
1
ARTICLES OF ASSOCIATION
OF
PING AN INSURANCE (GROUP) COMPANY OF CHINA, LTD.
CHAPTER 1: GENERAL PROVISIONS
Article 1
Ping An Insurance (Group) Company of China, Ltd. (the “Company”) is a company
limited by shares established in accordance with the Company Law of the People’s
Republic of China (the “Company Law”), the Securities Law of the People’s Republic
of China (the “Securities Law”), the Insurance Law of the People’s Republic of China
(the “Insurance Law”), Special Provisions of the State Council on Issuing and Listing
of Shares Abroad by Companies Limited by Shares (the “Special Provisions”) and other
relevant PRC laws and administrative regulations.
The Company was established upon the approval of the People’s Bank of China (the
“PBOC”) (Yin Fu [1988] No. 113) on March 21, 1988 and obtained a business license
with registration number Shen Xin Qi Zi No. 05716 on April 22, 1988. The Articles of
Association of the Company was approved by PBOC (Yin Fu [1996] No. 157) on May
24, 1996. The Company was registered with the State Administration for Industry and
Commerce (the “SAIC”) on January 16, 1997, and obtained a business license with
registration number 1000001001231. In 2016, the Company transferred the registration
authority to Market Supervision Administration of Shenzhen Municipality, and the
unified social credit code is 91440300100012316L.
The promoters of the Company are as follows: Industrial and Commercial Bank of
China, China Merchants Shekou Industrial Zone Co., Ltd., The China Ocean Shipping
(Group) Company, The Bureau of Finance of Shenzhen and Shenzhen New Horse
Investment Development Company Limited.
Article 2
Registered name of the Company
Chinese: 中国平安保险(集团)股份有限公司
English: Ping An Insurance (Group) Company of China, Ltd.
Article 3
Domicile: 47th, 48th, 109th, 110th, 111th and 112th
Floors, Ping An Finance Center, No. 5033
Yitian Road, Futian District, Shenzhen
Postal Code: 518033
Telephone: 4008866338
2
Facsimile: (0755) 82431019
Website: www.pingan.cn
Article 4
The legal representative of the Company shall be the chairman of the board of directors.
Article 5
The Company is a company limited by shares existing in perpetuity.
Article 6
The Company shall comply with the applicable laws, regulations and implement the
unified national finance and insurance objective and policy, and shall be guided,
managed, coordinated, supervised and scrutinized by the China Banking and Insurance
Regulatory Commission (the “CBIRC”).
Article 7
The Company has independent legal person properties and enjoys legal person property
rights. All the share capital of the Company shall be divided into shares of equal value.
The shareholders shall be liable towards the Company to the extent of their respective
shareholdings. The Company shall be liable for its debts to the extent of all its assets.
Article 8
The Company as an insurance group company manages and supervises its controlled
subsidiaries via its shareholding interests and conducts other financial businesses in
accordance with the applicable laws.
Article 9
The Company enacted these Articles of Association of the Company (these “Articles of
Association”) in accordance with the Company Law, Securities Law and other relevant
laws and administrative regulations of the PRC.
These Articles of Association shall become effective upon the approvals by
shareholders in a general meeting by way of a special resolution and by CBIRC are
obtained.
These Articles of Association shall be a legally binding document that regulates the
organization and acts of the Company as well as the rights and obligations between the
Company and the shareholders and among the shareholders from the date on which they
become effective. These Articles of Association shall be binding upon the Company and
its shareholders, directors, supervisors, and other senior management. All the above
3
persons may make claims about the rights and obligations related to Company matters
in accordance with these Articles of Association.
In case of any inconsistency between the contents of the Promoters’ Agreement,
Shareholders’ Contribution Agreement or other shareholders’ agreements and these
Articles of Association, these Articles of Association shall prevail.
Without prejudice to Chapter 23 of these Articles of Association, shareholders may sue
the Company in accordance with these Articles of Association. Shareholders may sue
other shareholders in accordance with these Articles of Association. Shareholders may
sue directors, supervisors and other senior management of the Company in accordance
with these Articles of Association. The Company may sue shareholders, directors,
supervisors and other senior management of the Company in accordance with the
Articles of Association.
For the purposes of the above paragraph, the term “sue” shall include the initiation of
proceedings in a court or the application of arbitration made to an arbitration
organization.
Article 10
References to “senior management” in these Articles of Association shall include the
chairman of the board of directors, the secretary of the board of directors, the CEO,
President (COO), Vice President, CFO and other personnel according to the regulations
of the CBIRC.
The qualification of the directors, supervisors and the senior management of the
Company shall be approved by the CBIRC.
Article 11
The Company may in accordance with applicable laws invest in other limited or joint
stock companies and bears responsibility for such investment of up to such capital
investments.
CHAPTER 2: PURPOSE AND SCOPE OF BUSINESS
Article 12
The business objective of the Company is: with professional service, products,
technology and talent, the Company is devoted to becoming a leading integrated finance
& insurance services group, and at the same time reform and creatively develop itself
in the field of finance & insurance services; under the prerequisites of scientific
decision-making, standardized management and stable management, to maximize the
values of shareholders, staff, customers and society, in order to promote and support the
development of the economy and the enhancement of society.
The Company, based on a modern enterprise regime, is continuously improving its
standards of operation and management, its ability to manage and control risk, its
4
solvency, its capacity of independent management, assumption of risks, its ability to
manage its profits and loss, and self-discipline.
Article 13
The business scope of the Company is subject to the content as verified by registration
authorities.
The business scope of the Company includes:
(1) investment in insurance enterprises；
(2) supervising and managing various kinds of domestic and international businesses
of the subsidiaries；
(3) develop businesses in the application of insurance funds；
(4) approved domestic and international insurance businesses;
(5) other businesses approved by CBIRC and the relevant governmental authorities.
CHAPTER 3: SHARES AND REGISTERED CAPITAL
Article 14
The Company shall have ordinary shares at all times. The Company may create other
classes of shares if necessary, upon approval by the examining and approving
departments authorized by the State Council. Shareholding in the Company shall be by
way of shares.
Article 15
The issue of the shares of the Company shall be based on the principle of openness,
fairness and justice. Each share of the same class shall have equal rights.
Shares of the same class issued at the same time shall be issued under the same condition
and at the same price. Shares subscribed by any entity or individual shall be paid for at
the same consideration.
Article 16
All shares issued by the Company shall have a par value, which shall be RMB1 for each
share.
For the purposes of the above paragraph, the term “RMB” shall refer to the lawful
currency of the People’s Republic of China.
5
Article 17
The Company may issue shares to investors inside the People’s Republic of China and
to investors outside the People’s Republic of China following approval from CSRC.
For the purposes of the preceding paragraph, the term “investors outside the People’s
Republic of China” shall refer to investors from foreign countries or from Hong Kong,
Macao or Taiwan that subscribe for shares issued by the Company, and the term
“investors inside the People’s Republic of China” shall refer to investors inside the
People’s Republic of China, excluding the above-mentioned regions, that subscribe for
shares issued by the Company.
Article 18
The shares issued by the Company to investors inside the People’s Republic of China
and to be subscribed for in Renminbi shall be referred to as “domestic shares”. Shares
issued by the Company to investors outside the People’s Republic of China and to be
subscribed in a foreign currency shall be referred to as “foreign shares”. Foreign shares
listed outside the PRC shall be referred to as “overseas listed foreign shares”. Both the
holders of domestic shares and holders of foreign shares shall be holders of ordinary
shares, and shall enjoy and bear the same rights and obligations.
For the purposes of the preceding paragraph, the term of “foreign currency” shall refer
to the lawful currency of a country or area outside the People’s Republic of China,
which is recognized by the State Administration of Foreign Exchange and can be used
to pay for the shares to the Company.
Article 19
The registered capital of the Company was RMB42 million at the time of establishment
in 1988, and was RMB1.5 billion at the time of share reorganization and re-registration
on January 16, 1997. Details of the number of shares subscribed and capital contribution
by the promoters are set out as follows:
No. Name of promoter Capital
contribution
Capital amount (in ten
thousands) Number of
shares
subscribed
(ten
thousand
shares)
Percentage in
1,500,000,000
total share
capital of the
Company
Time of
contribution Amount
payable Amount
contributed
1 Industry and
Commercial Bank
of China Cash 39606.8347 39606.8347 39606.8347 26.40
January
16,
1997
2 China Merchants Shekou
Industrial Zone
Co., Ltd.
Cash 26680.9271 26680.9271 26680.9271 17.79
January
16,
1997
6
3 China Ocean
Shipping(Group)
Company
Cash 17328.8029 17328.8029 17328.8029 11.55
January
16,
1997
4 Shenzhen
Finance Bureau Cash 12139.2110 12139.2110 12139.2110 8.09 January
16,
1997
5 Shenzhen New
Horse
Investment
Development Co.
Cash 13824.7736 13824.7736 13824.7736 9.22
January
16,
1997
Total 109580.5493 109580.5493 109580.5493 73.05％
The above promoters had transferred all of their shares.
Article 20
After the Company’s first overseas offering of foreign shares (the “H shares”) and the
successful listing on the Stock Exchange of Hong Kong Limited on June 24, 2004
following the approval by the corporate approving department authorized by the State
Council, the composition of the Company’s share capital was: 6,195,053,334 ordinary
shares, comprising 3,636,409,636 domestic shares representing 58.70% of the total
number of ordinary shares in issue and 2,558,643,698 H shares (including
1,170,751,698 H shares converted from shares held by foreign entities) representing
41.30% of the total number of ordinary shares of the Company in issue.
Article 21
After the overseas offer of H shares and the approval having been obtained for the initial
public offering in the PRC of 1.15 billion domestic shares and subsequent to the
approval of the non-public issue of shares, the issue of convertible corporate bonds and
the increase of share capital by way of conversion of the capital reserve, the composition
of the Company’s share capital as at the date hereof shall be: 18,280,241,410 ordinary
shares, comprising 10,832,664,498 domestic shares, representing 59.26% of the total
number of ordinary shares in issue and 7,447,576,912 H shares, representing 40.74%
of the total number of ordinary shares of the Company in issue. The shareholding
structure of the Company is set out below:
No. Class of shares（Name of
shareholder）
Number of
shares（share）
Percentage of
shareholding
1 Domestic shares not subject to
trading moratorium (A Share) 10,832,664,498 59.26%
Total domestic shares 10,832,664,498 59.26%
2 Overseas listed foreign shares not
subject to trading
moratorium (H Share)
7,447,576,912 40.74%
Total overseas listed foreign shares 7,447,576,912 40.74%
7
Total ordinary shares 18,280,241,410 100%
Article 22
Upon the CSRC approving the plan for issuing overseas listed foreign shares and
domestic shares, the board of directors of the Company may arrange for the
implementation of such plan by means of separate issues.
The Company’s plan for separate issues of overseas listed foreign shares and domestic
shares in accordance with the preceding paragraph may be implemented separately
within 15 months from the date of approval by the CSRC.
Article 23
If the Company issues overseas listed foreign shares and domestic shares separately
within the total amount of shares specified in the issue plan, such issues shall be fully
subscribed for at their respective offerings. If the shares cannot be fully subscribed for
once due to special circumstances, the shares may, subject to the approval of the CSRC,
be issued in several stages.
Article 24
The registered capital and paid-up capital of the Company is RMB18,280,241,410.
Article 25
Unless otherwise provided by laws and administrative regulations, shares of the
Company are transferable in accordance with the law and are not subject to any lien,
provided such share transfer is in compliance with relevant requirements of the CBIRC
and relevant regulatory organizations as well as these Articles of Association.
Article 26
The Company shall not accept any shares of the Company as the subject matter of a
pledge.
Article 27
The promoters’ shares of the Company shall not be transferred within one year from the
date of the establishment of the Company as a company limited by shares. The transfer
of the shares of the Company issued before the initial public offering of the domestic
shares (A shares) shall be conducted in accordance with the laws, administrative
regulations and the applicable listing rules.
Article 28
The directors, supervisors, senior management of the Company shall regularly declare
the number of shares held by them and the relevant changes. The transfer of the shares
8
in the Company held by the above officers shall be conducted in accordance with the
laws, administrative regulations, regulatory requirements and the applicable listing
rules.
Article 29
The proceeds gained by the Company’s directors, supervisors, senior management and
shareholders holding more than 5% of the Company’s shares from a disposal of the
shares within six months of its purchase or purchase within six months of its disposal
shall belong to the Company, and shall be reclaimed by the board of directors of the
Company. Securities companies which, pursuant to their underwriting obligations,
acquired excess shares of over 5% of the Company’s shares shall not be subject to the
six months’ restriction in their disposal of such shares.
If the board of directors of the Company fails to carry out in accordance with the above
provision, the shareholders shall be entitled to demand the board of directors to do so
within 30 days, failing which the shareholders shall be entitled to exercise their rights
for the benefit of the Company.
If the board of directors of the Company fails to execute in accordance with the first
paragraph of this Article, those directors who are responsible for such execution shall
bear joint liability.
Article 30
Upon transfer of the Company’s shares, the name of the transferees of the shares will
be registered in the register of shareholders as holders of such shares.
Article 31
All the issuance and transfer of overseas listed foreign shares shall be registered in the
register of shareholders maintained outside the PRC pursuant to Article 47. The
domestic shares of Company shall be centrally entrusted to the Shanghai branch of
China Securities Registration and Clearing Limited Company.
Article 32
The transfer of all or part of the shares by any holder of overseas listed foreign shares
shall be effected by the standard transfer form specified by Hong Kong Stock Exchange
or such other instrument of transfer as the board of directors may accept. The transfer
documents shall be signed by the transferor and the transferee by hand or in a machine-
imprinted format. The instrument of transfer shall be kept at the Company's registered
address or such other place as the board of directors may from time to time determine.
CHAPTER 4: INCREASE AND REDUCTION OF CAPITAL AND BUY BACK OF
SHARES
9
Article 33
The Company may increase or reduce its registered capital in accordance with the
provisions of these Articles of Association. Increase or reduction of the registered
capital of the Company shall be conducted in accordance with the Company Law,
relevant requirements of the CBIRC and other regulatory authorities and the procedures
as stipulated in these Articles of Association.
Changes to the registered capital by the Company shall be reported to the CBIRC for
approval and be registered at the registration authority in accordance with the law.
Article 34
The Company may, based on its operating and development needs, authorize the
increase of its capital in accordance with the relevant provisions of these Articles of
Association.
The Company may increase its capital by the following methods:
(1) by offering new shares to non-specified persons (including to issue new shares to
the general public and strategic investors);
(2) by placing new shares to existing shareholders;
(3) by allotting bonus issue to existing shareholders;
(4) by capitalizing its capital reserve;
(5) by issuing convertible bonds;
(6) by formulating employee shareholding schemes in accordance with the law and
issue shares to the employee shareholding schemes;
(7) by any other methods which is permitted by laws and administrative regulations.
The Company’s increase in capital by issuing new shares shall be handled in accordance
with the procedures provided for in relevant laws and administrative regulations and
after having been approved in accordance with these Articles of Association.
Article 35
When the Company is to reduce its registered capital, it shall prepare a balance sheet
and an inventory of assets.
The Company shall notify its creditors within 10 days from the date of adoption of a
resolution to reduce its registered share capital and shall make a public announcement
about the resolution in newspapers at least three times within 30 days of the said date.
The creditors shall, within 30 days since the date of receiving a written notice or within
45 days since the date of the first public announcement for those who have not received
10
a written notice, be entitled to require the Company to pay off its debts in full or to
provide a corresponding guarantee for repayment.
The registered capital of the Company following the reduction of capital shall not fall
below the minimum statutory requirement.
Article 36
The Company may, in one of the following circumstances, purchase the shares of the
Company:
(1) reduction in its registered capital;
(2) merger with another company holding shares in the Company;
(3) using the shares for employee shareholding schemes or as share incentives;
(4) request the Company to buy back shares held by shareholders disputing resolutions
passed during shareholders’ general meeting in relation to the mergers and divisions
of the Company;
(5) using the shares for converting bonds issued by the Company to convert them to
stocks; or
(6) necessary acts by the Company to protect its value while safeguarding the interests
of shareholders.
When the Company is to buy back shares because of the circumstances (1) and (2) set
out above, prior approval shall be obtained in shareholders’ general meeting; when the
Company is to buy back shares because of the circumstances (3), (5) and (6) set out
above, prior approval shall be obtained in board meeting where over two-thirds of the
directors are present.
Upon the purchase of the shares of the Company, the Company should fulfil its
disclosure obligation as required under the Securities Law.
Article 37
The Company may, with the approval of the relevant governing authority of the State,
proceed to buy back its shares in one of the following manners:
(1) to make an offer of buy back to all shareholders at the same proportion;
(2) to buy back shares through public trading on a stock exchange;
(3) to buy back through an off-market agreement; or
(4) other methods as permitted by the CSRC.
11
Article 38
Where the Company is to buy back shares through off-market agreement, prior approval
shall be obtained from the shareholders at general meeting in accordance with these
Articles of Association. With prior approval by shareholders at general meeting
obtained in the same manner, the Company may rescind or amend contracts concluded
in the manner set forth above or waive any of its rights under such contracts.
The contracts to buy back shares as referred to in the preceding paragraph includes, but
not limited to, an agreement to become obliged to buy back or to acquire of the right to
buy back.
The Company shall not assign a contract for the buy-back of its own shares or any of
its rights thereunder. Where the Company has the right to purchase redeemable share,
the purchase price shall be limited to a maximum price if the purchases are not made
through the market or by tender. If purchases are by tender, tenders shall be made
available to all shareholders on the same terms.
Article 39
After the Company has bought back its shares according to law, unless otherwise
specified by the government and the regulatory authorities, it shall cancel or transfer
the portion of shares concerned in accordance with the regulations of the law or these
Articles of Association and shall apply to the industry and commerce registration
authority of the change in registered capital following cancellation.
The amount of the Company’s registered capital shall be reduced by the total par value
of the shares cancelled.
Article 40
Unless the Company is in the course of liquidation, it shall comply with the following
provisions in buying back its issued and outstanding shares:
(1) where the Company buys back its shares at par value, payment shall be made out
of the book balance of distributable profits of the Company or out of proceeds of
a fresh share issue for that purpose;
(2) where the Company buys back its shares at a premium to their par value, payment
up to the par value shall be made out of the book balance of distributable profits
of the Company or out of a fresh share issue made for that purpose. Payment of
the portion in excess of the par value shall be effected as follows:
(i) if the shares bought back were issued at their par value, payment shall be
made out of the book balance of distributable profits;
(ii) if the shares bought back were issued at a premium to their par value,
payment shall be made out of the book balance of distributable profit or out
12
of a fresh share issue made for that purpose; provided that the amount paid
out of the proceeds of the fresh share issue shall not exceed the total
premium obtained at the time of issuance of the old shares nor the current
amount of the Company’s premium account (or capital common reserve
account) (including the premiums from the fresh share issue) at the time of
buy-back;
(3) the sums paid by the Company for the purposes set forth below shall be paid out
of the Company’s distributable profits:
(i) acquisition of the right to buy-back its own shares;
(ii) modification of any contract for buying back its own shares;
(iii) release from any of its obligations under any buy-back contract.
(4) after the par value of the annulled shares has been deducted from the registered
capital of the Company in accordance with relevant provisions, that portion of the
amount deducted from the distributable profit for payment of the par value portion
of the shares bought back shall be transferred to the Company’s premium account
(or capital common reserve account).
CHAPTER 5: FINANCIAL ASSISTANCE FOR THE PURCHASE OF COMPANY
SHARES
Article 41
The Company or its subsidiaries (including associated companies of the Company) shall not
at any time in any manner provide financial assistance to anyone purchasing or proposing to
purchase the Company’s shares, including but not limited to financial assistance provided in
the form of lending, guarantee to any director, supervisor or senior management to purchase
the Company’s shares. Persons becoming directly or indirectly liable as a result of the
purchase of shares are also included.
The Company and its subsidiaries (including associated companies of the Company)
shall not at any time in any manner provide financial assistance for the purpose of
reducing or relieving the aforementioned persons of their liability.
This Article shall not be applicable to circumstances as stated in Article 43.
Article 42
The “financial assistance” referred to in this chapter shall include (but not be limited to)
financial assistance in the forms set out below:
(1) gift;
13
(2) guarantee (including the assumption of liability by the guarantor or the provision
of assets by the guarantor to secure the performance of obligation by the obligor),
compensation (other than compensation in respect of the Company’s own fault),
relief or waiver of rights;
(3) provision of a loan or the making of any other agreement under which the
obligations of the Company are to be fulfilled before the obligations of another
party, or the change in parties to, or the assignment of rights under such loan or
contract; and
(4) any other form of financial assistance given by the Company when the Company
is insolvent or has no net assets or when its net assets would thereby be reduced
to a material extent.
The “assumption of obligations” referred to in this chapter shall include the assumption
of obligation by way of contract or by way of arrangement (irrespective of whether such
contract or arrangement is enforceable or not and irrespective of whether such
obligation is to be borne solely by the obligor or jointly with any other persons) or by
any other means which results in a change in his/her financial position.
Article 43
The following activities should not be regarded as restricted activities under Article 41:
(1) the provision of financial assistance by the Company in good faith for the benefit
of the Company and the main purpose of the financial assistance is not to purchase
shares in the Company, or the financial assistance is an incidental part of a master
plan of the Company:
(2) the lawful distribution of the Company’s assets as dividends;
(3) the distribution of dividends in the form of shares;
(4) a reduction of registered capital, a buy-back of shares, capital restructuring, etc.
in accordance with these Articles of Association;
(5) the provision of loans by the Company within its scope of business and in the
ordinary course of its business (provided that the net assets of the Company are
not thereby reduced or that, to the extent that the assets are thereby reduced, the
financial assistance was paid out of the Company’s distributable profits); and
(6) contributions made by the Company to the employee shareholding scheme
(provided that the net assets of the Company are not thereby reduced or that, to
the extent that the assets are thereby reduced, the financial assistance was paid out
of the Company’s distributable profits).
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CHAPTER 6: SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
Article 44
The share certificates of the Company shall be in registered form.
The share certificates of the Company shall bear the following main items:
(1) name of the Company;
(2) date of registration and establishment of the Company;
(3) type of shares, par value and the number of shares it represents;
(4) the serial number of share certificates;
(5) other matters as required by the Company Law, and the securities exchange(s) on
which the shares of the Company are listed.
Article 45
Share certificates shall be signed by the chairman of the board of directors. The stock
exchange, where the Company’s shares are listed, requires signature by senior
management, shall be signed by the responsible senior management. Share certificates
shall take effect upon affixing of the Company’s seal or a seal imprinted thereon. The
affixing of the Company’s seal on share certificates shall be authorized by the board of
directors. The chairman of the board of directors or responsible senior management may
sign on the certificate or use printed form.
Article 46
The Company shall keep a register of shareholders which shall contain the following
particulars:
(1) the name (title), address (domicile), occupation or nature of each shareholder;
(2) the class and number of shares held by each shareholder;
(3) the amount paid-up or agreed to be paid-up on the shares held by each shareholder;
(4) the serial numbers of the shares held by each shareholder;
(5) the date on which each shareholder was registered as a shareholder; and
(6) the date on which each shareholder ceased to be a shareholder.
The register of shareholders shall be sufficient evidence of the shareholders’
shareholding in Company, unless there is evidence to the contrary.
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Article 47
The Company may, in accordance with the mutual understanding and agreements made
between the CSRC and overseas securities regulatory organizations, keep outside the
People’s Republic of China its register of holders of overseas listed foreign shares, and
appoint overseas agent to manage such register of shareholders. The original register of
shareholders for holders of H shares shall be maintained in Hong Kong.
The Company shall keep at its domicile a duplicate of the register of holders of overseas
listed foreign shares. The appointed overseas agent shall ensure consistency between
the original and the duplicate register of shareholders at all times.
In the event that the original and duplicate of the register of holders of overseas listed
foreign shares are inconsistent, the original shall prevail.
Article 48
The Company shall keep a complete register of shareholders.
The register of shareholders shall include the following parts:
(1) a register kept at the Company’s domicile other than those provided for under
items (2) and (3) of this paragraph;
(2) the register(s) of holders of overseas listed foreign shares kept in the place(s) of
the securities exchange(s) outside the People’s Republic of China on which the
shares are listed; and
(3) registers of shareholders kept in such other places as the board of directors may
decide necessary for listing purposes.
Article 49
Different parts of the register of shareholders shall not overlap. The transfer of shares
registered in a certain part of the register of shareholders shall not, during the
continuance of the registration of such shares on that part of the register, be registered
in any other part of the register.
Changes and corrections to each part of the register of shareholders shall be in
accordance with the laws of the places where that part is kept.
Article 50
All the fully paid overseas listed foreign shares shall be freely transferable pursuant to
these Articles of Association. However, in relation to H shares the board of directors
may refuse to recognize any instrument of transfer without providing any reason thereof,
unless the following conditions are satisfied:
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(1) a sum of HK$2.5 (per transfer document) or such other sum as the board of
directors may require from time to time (provided that such sum shall not exceed
such higher amount as stated in the Stock Exchange Listing Rules from time to
time), has been paid to the Company for registration of the share transfer
documents or such other documents in relation to or affecting the ownership of
the shares;
(2) the instrument of transfer only involves H shares;
(3) the stamp duty payable in respect of the instrument of transfer has been paid;
(4) relevant share certificates and such other evidence which the board of directors
may reasonably require to show that the transferor has the right to transfer the
shares have been produced;
(5) if the shares are transferred to joint holders, the number of joint holders shall
not exceed four; and
(6) the shares concerned are free of any lien in favor of the Company.
Article 51
No changes resulting from share transfers may be made to the register of shareholders
within 30 days prior to a shareholders’ general meeting or five days prior to the
reference date set by the Company for the purpose of distribution of dividends.
Article 52
Where the Company convenes a shareholders’ general meeting, distributes dividends,
liquidation or other matters requiring confirmation of equity interests, this should be
fixed by the board of directors or the person convening the shareholders’ general
meeting as the record day. Shareholders registered on the register of members following
close of trading on record date shall be entitled to those rights.
Article 53
Any person that challenges the register of shareholders and requests for his name to be
entered into or removed from the register may apply to a competent Court for correction
of the register.
Article 54
Any shareholder who is registered on the register of shareholders or requests for his
name to be entered into the register of shareholders may apply to the Company for
issuance of a replacement certificate in respect of such shares (“Relevant Shares”) if his
share certificate (“Original Share Certificate”) is lost.
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Applications for the replacement of share certificates from holders of domestic shares
who have lost their certificates shall be dealt with in accordance with relevant
requirements of the Company Law.
Applications for the replacement of share certificates from holders of overseas listed
foreign shares who have lost their certificates may be dealt with in accordance with the
laws, securities exchange regulations and other relevant regulations of the place where
the original register of holders of the overseas listed foreign shares is kept.
Applications for the replacement of share certificates from holders of H shares who
have lost their certificates shall comply with the following requirements:
(1) The applicant shall submit the application in the form prescribed by the Company,
accompanied by a notarial certificate or statutory declaration. The notarial
certificate or statutory declaration shall include the applicant’s reason for the
application, the circumstances and proof of the loss of the share certificate and a
declaration that no other person may require registration as a shareholder in
respect of the Relevant Shares;
(2) The Company shall not have received any declaration requesting for registration
as a shareholder in respect of such shares from any person other than the applicant
before it decides to issue a replacement share certificate;
(3) If the Company decides to issue a replacement share certificate to the applicant,
it shall publish a public announcement of its intention to do so in the newspapers
or periodicals designated by the board of directors; the period of the public
announcement shall be 90 days, during which such announcement shall be
published repeatedly at least once every 30 days;
(4) Before publishing the public announcement in relation to its intention to issue a
replacement share certificate, the Company shall submit a copy of the
announcement to be published to the securities exchange on which it is listed, and
may proceed with its publication after having received a reply from the securities
exchange confirming that the announcement has been displayed in the securities
exchange. The Company shall display the public announcement in the securities
exchange for a period of 90 days. If the application for issuance of a replacement
share certificate was made without the consent of the registered holder of the
Relevant Shares, the Company shall mail to such shareholder a photocopy of the
public announcement that it intends to publish;
(5) At the expiration of the 90-day period provided for in items (3) and (4) hereof, if
the Company did not receive any objection to the issuance of a replacement share
certificate from any person, it may issue a replacement share certificate according
to the application of the applicant;
(6) When the Company issues a replacement share certificate in accordance with this
Article, it shall immediately cancel the Original Share Certificate and record such
cancellation and the issuance of the replacement share certificate in the register of
shareholders; and
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(7) All expenses relating to the cancellation of the Original Share Certificate and the
issuance of a replacement share certificate shall be borne by the applicant. The
Company shall be entitled to refuse to take any action until the applicant has
provided a reasonable guarantee.
Article 55
After the Company has issued a replacement share certificate in accordance with these
Articles of Association, it shall not delete from the register of shareholders the name of
a bona fide purchaser of the replacement share certificate mentioned above or a
shareholder that is subsequently registered as the owner of the shares (provided that he
is bona fide purchaser).
Article 56
The Company shall not be liable for any damages sustained by any person by reason of
the cancellation of the Original Share Certificate or the issuance of the replacement
share certificate, unless the claimant is able to prove that the Company has acted in a
deceitful manner.
CHAPTER 7: RIGHTS AND OBLIGATIONS OF SHAREHOLDERS
Article 57
Persons on the Company’s register of members shall be deemed to be the Company’s
lawful shareholders.
Shareholders shall enjoy rights and assume obligations according to the class and
amount of shares held by them. Shareholders who hold shares of the same class shall
enjoy the same rights and assume the same obligations.
Article 58
Holders of ordinary shares of the Company shall enjoy the following rights:
(1) to receive dividends and other profit distributions in proportion to their
shareholdings;
(2) to request, convene, hold, participate or authorize proxies to attend shareholders’
meeting, and to exercise voting rights accordingly;
(3) to supervise and control the Company’s business activities, and make suggestions
or inquiries in accordance with the law;
(4) to transfer, gift or encumber shares held by it in accordance with laws,
administrative regulations, regulatory requirements and these Articles of
Association;
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(5) to obtain relevant information in accordance with these Articles of Association,
which shall include:
(I) to obtain these Articles of Association upon payment of a charge to cover costs;
(II) to inspect and make copies, upon payment of reasonable charges, of:
(i) all parts of the register of shareholders;
(ii) personal information of the directors, supervisors, and other senior
management of the Company, including:
(a) present and former names and aliases;
(b) principal address (place of domicile);
(c) nationality;
(d) primary and all other part-time occupations and duties;
(e) identification documents and their numbers;
(iii) the status of the Company’ share capital;
(iv) the annual report;
(v) reports showing the aggregate par value, number of shares, and
maximum and minimum prices paid in respect of each class of shares
bought back by the Company since the last fiscal year as well as all
the expenses paid by the Company therefore; and
(vi) minutes of shareholders’ meetings, board resolutions and supervisors’
resolutions, receipts of the Company’s loan notes, financial reports;
In the event that any leakage of the above information by shareholders who obtained
such information in accordance with these Articles of Association which results in
damages to the Company’s legitimate interests, such shareholders shall bear the
compensation liability in accordance with the law for the relevant loss.
(6) to participate in the distribution of the Company's surplus assets according to their
shareholding when the Company is terminated or liquidated;
(7) shareholders against the mergers or divisions of the Company tabled at
shareholders’ meeting, to request the Company to buy back its shares;
(8) other rights granted by laws, administrative regulations, departmental rules and
these Articles of Association.
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Article 59
A shareholder who wants to examine the mentioned information or request for the
related material shall provide the Company with the written documentation evidencing
the class and number of shares held by the shareholder. The Company shall provide the
related information or material as per their request after having verified the identity of
the shareholder.
Article 60
Where contents of resolutions of shareholders’ in general meeting and board meetings,
or its convention procedures, manner of voting is in contravention of laws,
administrative regulations and the Articles of Association, shareholders have the right
to resolve matters according to related procedures provided in the relevant laws,
administrative regulations and these Articles of Association.
Article 61
Directors, supervisors, senior management infringing laws, administrative regulations
or these Articles of Association while executing their duties, resulting in damages to the
interests of the Company or the shareholders; or where other persons infringe upon the
lawful rights of the Company, resulting in losses to the Company, shareholders have the
right to report the incident directly to the CBIRC, and resolve the matter according to
related procedures provided in the relevant laws, administrative regulations and these
Articles of Association.
Article 62
Where shareholders’ legal rights are infringed by directors or senior management, they
shall have the right to request cessation of infringement and payment of damages in
accordance with the relevant laws, administrative regulations and these Articles of
Association.
Article 63
Holders of ordinary shares of the Company shall have the following obligations:
(1) abide by the relevant laws, administrative regulations, regulatory requirements
and these Articles of Association, exercise shareholder’s rights in accordance with
the law; protect the Company’s reputation, support the Company’s business
development and shall not directly or indirectly interfere with the decision making
or daily operation and management of the Company conducted according to the
law;
(2) contribute to the registered capital according to the amount of shares subscribed
for and the method of purchasing such shares;
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(3) bear responsibility for the Company's debts to the extent of their shareholding in
the Company and, unless according to the laws or regulations, shall not give up
their shares;
(4) not to abuse rights afforded to shareholders and harm the Company or interests of
other shareholders; not to abuse the Company’s separate legal existence or the
limited liability of shareholders to violate the rights of the Company’s creditors;
Shareholders abusing shareholders’ rights and resulting in damage to the
Company or other shareholders shall bear the compensation responsibility in
accordance with laws;
Shareholders abusing the Company’s separate legal existence and the limited
liability of shareholders, avoiding debt, resulting in serious damage to the
Company relationship with its creditors, shall bear joint responsibility for the
Company’s debt;
(5) any contributed capital and shareholding shall comply with regulatory
requirements, and shares held by nominees or at a ratio higher than the permitted
percentage shall not be allowed. If the contribution by or behaviors of any
shareholder are in violation of laws, regulations and relevant regulatory
requirements, the shareholder shall not exercise shareholders’ rights including the
voting right, the entitlement to dividends and the right to nominate candidates,
and shall undertake to accept the regulatory actions to be taken by the CBIRC,
such as the restrictions on shareholders’ rights and the order to transfer
shareholding.
Investor who holds more than 5% of the issued shares of the Company by means of
trading through the stock exchanges, shall apply for the approval by the CBIRC within
five days after the occurrence of the fact. The CBIRC shall have the right to request the
investor who do not meet the relevant qualification requirements to transfer the shares.
If the holding of a number of shares that exceeds the permitted number provided above
(the “Excess Shares”) by the Company’s shareholders is not approved by the CBIRC,
then prior to obtaining the approval of the CBIRC in exercising his rights as a
shareholder prescribed by Article 58, he shall be subject to the following restrictions in
respect of the Excess Shares, including but not limited to:
(i) the Excess Shares do not carry any voting rights at the general meeting
or any class meeting of shareholders; and
(ii) the Excess Shares do not carry any right of nominating directors and
supervisors provided in these Articles of Association; and
(iii) the Excess Shares do not carry any right of receiving dividends.
Notwithstanding the foregoing, a shareholder holding Excess Shares shall not be subject
to any restrictions in exercising his rights under Article 58(6).
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In the event that the holding of the Excess Shares by the Company’s shareholders is not
approved by the CBIRC, such shareholders shall transfer the Excess Shares within the
time period as stipulated by the CBIRC from the date of disapproval by the CBIRC.
(6) persons holding the Company’s foreign shares (other than approved clearing
houses by Hong Kong laws or other representatives of the same (“Recognized
Clearing House”)), shall inform the Company’s share registrar in time, and report
to the board of directors of the Company for record when there are any changes
in their legal representative, company name, business address, business scope, or
other major events. In respect of a Recognized Clearing House, when its
authorized signatories, company name or address change, it shall inform the
Company's registrar in time; and
(7) shareholders shall support the Company to improve its solvency when the
Company fails to meet the regulatory requirements;
(8) obey and implement the resolutions passed at the shareholders’ general meeting;
(9) cooperate with regulatory authorities to carry out investigations and risk
disposition when risk events or serious non-compliance activities concerning the
Company occur;
(10) not to damage the interests of other shareholders and the Company and not to
agree that the pledgee or the affiliated parties shall exercise the voting rights when
any shareholder pledges the shares of the Company;
(11) other obligations stipulated in laws, administrative regulations and these Articles
of Association.
Other than the conditions agreed to by ordinary shareholders at the time of subscription,
ordinary shareholders shall not be subject to additional conditions unilaterally imposed
thereafter.
Article 64
In addition to the requirements set forth in Article 63, shareholders holding 5% or more
of the Company’s shares with voting rights shall also undertake the following
obligations:
(1) notify the Company in writing on the day of occurrence where the shares of the
Company held are involved in litigation, arbitration, pledges or release of pledges;
(2) if any connected relationship exists between shareholders holding 5% or more of
the Company’s shares, such shareholders shall report in writing to the board of
directors of the Company within five working days from the date on which such
relationship takes place, containing at least the name of the connected shareholders
and an overview of the connected relationship;
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(3) shall faithfully notify the Company of information on the controlling shareholder
and de facto controller; if there is any change in the controlling shareholder and de
facto controller, notify the Company in writing of such changes as well as affiliated
parties and the connected relationship within five working days upon the
occurrence of those changes, and perform procedures as specified in regulations;
(4) notify the Company in writing within fifteen working days upon the occurrence of
a merger, separation, dissolution, bankruptcy, closing down, takeover and other
material matters or changes in its legal representative, company name, site for
business operation, business scope and other material matters.
Unless otherwise stipulated by laws, administrative regulations or regulatory
requirements, the Company shall not freeze or otherwise impair any right of any person
for the reason that the person fails to disclose that he directly or indirectly enjoys rights
attached to the shares of the Company.
Article 65
The Company’s shareholders shall not make use of its connected relationship to harm
the Company’s interests. Shareholders contravening the regulations resulting in the
Company suffering losses shall compensate the Company.
The Company’s controlling shareholder and de facto controller owes a duty of honour
to the Company and the Company’s other shareholders. The controlling shareholder
must strictly comply with the laws in exercising its rights as capital contributor.
Controlling shareholders must not use distribution of dividends, reorganization of assets,
external investments, capital consumption, loans and guarantees, use of insurance funds,
connected transactions etc., and shall not exploit their position to harm the Company or
other shareholders.
Article 66
In addition to the obligations imposed by law, administrative regulations or the listing
rules of the securities exchange(s) on which the shares of Company are listed,
controlling shareholders may not, in the exercise of their shareholders’ powers, make
decisions prejudicial to the interests of all or part of the shareholders as a result of the
exercise of their voting rights on the issues set forth below:
(1) relieving a director or supervisor of the responsibility to act honestly in the best
interests of the Company;
(2) granting approval to a director or supervisor (for his own or another person’s
benefit) for depriving the Company of its property in any way, including (but not
limited to) any opportunities that are favorable to the Company; or
(3) granting approval to a director or supervisor (for his own or another person’s
benefit) for depriving other shareholders of their rights or interests, including (but
not limited to) rights to distributions and voting rights, unless pursuant to a
24
restructuring of the Company submitted to and adopted by the shareholders’
general meeting in accordance with these Articles of Association.
Article 67
For the purposes of the preceding Article, the term “controlling shareholder” shall refer
to a person that satisfies any of the following conditions:
(1) that person, where acting alone or in concert with other parties, has the power to
elect more than half of the directors;
(2) that person, where acting alone or in concert with other parties, can exercise or
control the exercise of over 30% of the Company’s voting rights;
(3) that person, where acting alone or in concert with other parties, holds over 30%
of the issued shares of the Company; or
(4) that person, where acting alone or in concert with other parties, has actual control
over the Company in any other manner.
For the purposes of this chapter, the term “acting in concert” shall refer to two or more
persons acting unanimously, achieved by way of an agreement (whether orally or in
writing), to obtain voting rights in the Company through any of such persons, so as
strengthen their control over the Company.
Article 68
Reference to de facto controller above shall mean individuals not being shareholders
but, o via investment relationships, agreements or other arrangements can actually
control the activities of the Company.
CHAPTER 8: SHAREHOLDERS’ GENERAL MEETINGS
Article 69
The shareholders’ general meeting shall be the organ of authority of the Company and
shall exercise its functions and powers according to laws.
Article 70
The shareholders’ general meeting shall exercise the following functions and powers:
(1) to determine the business policies and investment plans of the Company;
(2) to elect and replace directors and to determine matters relating to the remuneration
of the directors;
25
(3) to elect and replace the supervisors other than those representing employees of
the Company and to determine matters concerning the remuneration of
supervisors;
(4) to consider and approve the reports of the board of directors;
(5) to consider and approve the reports of the supervisory committee;
(6) to consider and approve the Company’s annual financial budget and final account
proposals;
(7) to examine and approve the Company’s profits distribution plans and loss
recovery plans;
(8) to pass resolutions relating to the increase or reduction of the Company’s
registered capital;
(9) to pass resolutions relating to matters such as the merger, division, dissolution or
liquidation of the Company;
(10) to pass resolutions relating to the issuance of bonds or other securities by the
Company or the listing of the Company;
(11) to pass resolutions on the appointment, dismissal or discontinuation of
engagement of accounting firms responsible for performing regular and statutory
audits to the financial reports of the Company;
(12) to amend these Articles of Association and deliberate the procedural rules of the
general meetings, the board of directors and the supervisory committee;
(13) to consider proposals raised by shareholder(s), individually or collectively
representing over 3% of the Company’s voting shares;
(14) to consider matters relating to the Company’s transaction of purchase or sell of
major assets within one year with the transaction amount exceeds 30% of the latest
audited total assets of the Company;
(15) to consider and approve matters relating to the changes in the use of proceeds
from share offerings;
(16) to consider share incentives schemes;
(17) to consider and approve the following external guarantees of the Company:
(i) any external guarantee to be given by the Company and its controlled
subsidiaries, the total amount of which reaches or exceeds 50% of its latest
audited net assets;
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(ii) any external guarantee to be given by the Company, the total amount of which
reaches or exceeds 30% of its latest audited total assets;
(iii) any guarantee to be given to a company whose gearing ratio exceeds 70%;
(iv) any single guarantee whose amount exceeds 10% of its latest audited net
assets;
(v) other guarantee granted by regulatory organizations;
(18) to pass resolutions on purchase of the shares of the Company because of the
circumstances (1) and (2) as required in Article 36 of these Articles of Association;
(19) to establish corporate bodies, conduct material external investments, material
asset disposal and write-off, material asset pledges, etc. Please refer to Article 139
for the criteria of “material” referred to in this provision;
(20) any other matters that shall be resolved by the shareholders in general meeting as
required by laws, administrative regulations, departmental rules, listing rules or
these Articles of Association.
Article 71
Unless the Company is in danger or under other special circumstances, the Company
shall not, without shareholders’ approval by way of a special resolution, enter into
agreements with persons other than directors, supervisors or senior management
granting that person responsibility for the management of all or part of the Company’s
material business.
Article 72
Shareholders’ general meetings shall be divided into annual general meetings and
extraordinary general meetings. Shareholders’ general meetings shall be convened by
the board of directors. Annual general meeting shall be held once every year and within
six months from the end of the preceding financial year.
The Company shall upon occurrence of any of the following events convene an
extraordinary general meeting within two months:
(1) the number of directors falls short of the minimum number required by the
Company Law or is less than two-thirds of the number required by these Articles
of Association;
(2) the unrecovered losses of the Company amount to one-third of the total amount of
its paid-up share capital;
(3) upon request(s) by shareholder(s) individually or collectively holding more than
10% of the Company’s share;
27
(4) it is deemed necessary by the board of directors or it is proposed by the supervisory
committee;
(5) as proposed by more than half and no less than two of the independent directors;
(6) any other circumstances required by the laws, administrative regulations,
departmental rules and these Articles of Association.
Article 73
The Company shall arrange for the venue for a physical meeting to be held. Where the
legality and validity of the shareholders’ general meeting is ensured, shareholders may
be convenient to attend the meeting by the Company making available other modern
modes of communication technology, including adopting safe, economical, convenient
voting platforms via the internet. Shareholders participating using the above means
shall be considered as present at the meeting.
Article 74
When the Company convenes a shareholders’ general meeting, a written notice to notify
all registered shareholders must be given no later than 45 days before the meeting. Such
notice shall contain the matters to be considered at the meeting as well as the date and
venue of the meeting. Any shareholder intending to attend the meeting shall send a
written reply to the Company 20 days before the date of meeting.
The Company shall report the notice to the CBIRC in writing and by email 10 days
prior to the meeting.
Article 75
When the shareholders’ general meeting is held, the board of directors, the supervisory
committee and the shareholders individually or collectively holding more than 3% of
the Company’s shares shall have the right to put forward a proposal in writing to the
Company, and the Company shall incorporate those matters in the proposal which fall
within the scope of the duties of the shareholders’ general meeting into the agenda of
such meeting.
The shareholders individually or collectively holding more than 3% of the Company’s
shares may submit in writing an interim proposal to the convener 10 days before the
date of the convening of the shareholders’ general meeting. The convener shall serve a
supplementary notice within two days upon receipt of the interim proposal to announce
the content of the interim proposal.
Except for the above provision, the convener may not change the agenda set out in the
notice of the shareholders’ general meeting or add new proposal after the notice of the
shareholders’ general meeting has been served.
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The proposals that have not been set out in the notice of the shareholders’ general
meeting or that are not in line with Article 76, shall not be voted on or resolved at the
shareholders’ meeting.
Article 76
Proposals for shareholders’ general meeting shall satisfy the following conditions:
(1) the content shall not contravene laws, rules and regulations and shall be within
the scope of operation of the Company and scope of duties of the shareholders’
general meeting;
(2) the proposals shall have definite subjects and specific matters for resolution;
and;
(3) the proposals shall be submitted or delivered to the board of directors in writing.
Article 77
The board of directors shall examine the proposals of the shareholders’ general meeting
in accordance with Article 76 and in line with the principal of pursuing the maximum
benefits for the Company and the shareholders. If the board of directors decides not to
include the proposals in the agenda of the shareholders’ general meeting, it shall give
the reasons and explanations at that meeting.
Article 78
If the proposing shareholder disagrees with the board of directors’ decision not to
include his/her proposed motion(s) in the agenda of the shareholders’ general meeting,
he may request the convening of an extraordinary shareholders’ meeting in accordance
with the provisions of Article 108.
Article 79
The Company shall calculate the number of voting shares represented by the
shareholders who have indicated their intention to attend the shareholders’ general
meeting based on the written replies received 20 days before the meeting. If the number
of such voting shares reaches half of the total number of the Company’s voting shares,
the Company may convene the shareholders’ general meeting. Otherwise, the Company
shall, within five days, inform the shareholders again of the matters to be considered at
the meeting, the date and venue of the meeting by way of public announcement. After
making the announcement, the shareholders’ general meeting may be convened.
Extraordinary general meetings may not decide on matters not specified in the notice
or announcement.
Article 80
The notice of the shareholders’ general meeting shall meet the following requirements:
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(1) be made in writing;
(2) specify the venue, date and time of the meeting;
(3) specify the record date for the purpose of determining which shareholders are
entitled to attend the shareholders' meeting;
(4) the name and contact number of the general contact person handling matters in
relation to the shareholders’ meeting;
(5) set out the matters to be considered at the meeting;
(6) provide the shareholders with such information and explanation as necessary for
them to make informed decisions in connection with the matters to be discussed.
This principle shall apply (but not limited to) when the Company proposes a
merger, buy back of shares, reorganization of share capital or other restructuring,
it shall provide the specific conditions and contracts (if any) of the proposed
transaction, and explain the causes and effects of the transaction;
(7) it shall disclose the nature and extent of material conflict of interests, if any, of
any director, supervisor or senior managerial in any matter to be discussed; and
provide an explanation of the difference, if any, between the way in which the
matter to be discussed would affect such director, supervisor and senior
management in his capacity as shareholder and the way in which such matter
would affect other shareholders of the same category;
(8) contain the full text of any special resolution to be proposed and approved at the
meeting;
(9) contain a clear statement that shareholders entitled to attend and vote at the
meeting have the right to appoint one or more proxies to attend and vote at the
meeting on their behalf and that such proxies need not be shareholders;
(10) the time and place for the delivery of the meeting’s proxy form.
Article 81
If the election of directors or supervisors is proposed to be discussed at a shareholders’
general meeting, the notice of such meeting shall fully disclose the detailed information
of the candidates for directors or supervisors, which shall at least include:
(1) personal particulars, including educational background, working experiences,
and concurrent positions;
(2) whether he has any affiliation with the Company, its controlled shareholders and
de facto controllers;
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(3) disclosure of the holding of the amount of shares of the Company; and
(4) whether he has been subjected to the punishment by the CSRC or any other
relevant authorities or reprimand of the stock exchange.
Unless a director or supervisor is elected via the accumulative voting system, the
nomination of each director and supervisor shall be by way of a separate resolution.
Article 82
The notice of a shareholders’ general meeting shall be served on the shareholders
(whether or not entitled to vote thereat) by assigned persons or prepaid mail to the
recipient’s address shown in the register of shareholders (unless otherwise required by
these Articles of Association). For holders of domestic shares, the notice of a
shareholders’ general meeting may also be given by public announcement.
The public announcement referred to in the preceding paragraph shall be published in
one or more newspapers specified by the China Securities Regulatory Commission on
any day from 45 to 50 days prior to the meeting. Once the announcement has been
published, all holders of domestic shares shall be deemed to have received notice of the
relevant meeting.
Article 83
The notice of general meeting, information or explanatory statement that shall be served
on holders of overseas listed foreign shares shall be delivered by any of the following
means:
(1) by personal delivery or by mail to the registered address of such holders of
overseas listed foreign shares. The Company shall use its best endeavours to
deliver in Hong Kong the notice that shall be served on the holders of H shares;
(2) posting on the Company’s website of the Company (www.pingan.cn) or the
website designated by the stock exchange where the Company is listed
according to applicable laws, administrative regulations and the relevant listing
rules;
(3) any other means acceptable to stock exchange where the shares of the Company
are listed.
Article 84
Upon delivery of the notice of a shareholders’ general meeting, the board of directors
shall not delay or cancel the meeting to be held, unless there is a proper reason; motions
stated in the notice of general meetings shall not be cancelled. Where the shareholders’
general meeting is to be delayed or cancelled, the convener shall announce reasons
therefor not less than two working days prior to the original date of the meeting, the
register date of shareholders’ shall not be changed therefore.
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Article 85
The board of directors and other convener shall take necessary measures to ensure the
proper order of the shareholders’ general meeting. The Company shall take actions to
stop anyone from interrupting the meeting, making trouble or infringing the lawful
interests of other shareholders and shall refer such cases to relevant authorities for
handling in time.
Article 86
All the shareholders appearing on the register of shareholders on the shareholding
record date or their proxy are entitled to attend the shareholders’ general meeting and
to exercise their voting right according to the relevant laws, regulations and these
Articles of Association.
Any shareholder entitled to attend and vote at a shareholders’ meeting shall have the
right to appoint one or more persons (who need not be a shareholder) as his proxy or
proxies to attend and vote on his behalf. Such proxy may exercise the following rights
according to his entrustment by the shareholder:
(1) the shareholder’s right to speak at the shareholders’ general meeting;
(2) the casting of votes in exercising his right to vote.
Article 87
Shareholders shall appoint proxy in writing, signed by the person appointing or person
authorised in writing. An instrument appointing a legal entity as proxy shall have
applied to it its company chop or signed by its directors or duly authorized person or
other authorized signatory. The form of proxy shall state the number of shares in respect
of which the proxy shall act. Where multiple proxies are appointed, each instrument of
proxy shall state the number of shares in respect of which the particular proxy shall act.
Article 88
The instrument appointing a voting proxy shall be deposited at the domicile of the
Company or at the other place as specified in the notice of the meeting within 24 hours
prior to the meeting to which the voting right as appointed by the instrument relates or
within 24 hours prior to the specified time of the vote. Where the instrument is signed
by another person authorized by the entrusting party, the power of attorney or other
document authorizing the signature shall be notarized. The notarized power of attorney
or other authorizing document shall be deposited together with the instrument
appointing the proxy at the domicile of the Company or at such other place as specified
in the notice of the meeting.
Where the entrusting party is a legal person, its legal representative or the person
authorized by resolution of its board of directors or other decision-making body shall
be entitled to attend the Company’s shareholders’ meeting as the representative of such
legal person.
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Article 89
Any form of proxy instrument sent to shareholders by the board of directors of the
Company for the appointment of proxy shall set out options for the shareholder to
instruct its proxy as to whether to vote for or against, and shall give shareholders the
opportunity to give instructions for each proposed resolution. The form of proxy shall
specify in the absence of voting instructions from the shareholder, the proxy may vote
as he thinks fit.
Article 90
Individual shareholders attending in person shall produce identity documents or other
valid documents or evidence, securities account card as proof of identity.
Article 91
Proxies attending for individual shareholders shall produce identity documents and the
instrument of proxies. Proxies attending for legal person shareholders appointed by the
legal representative of the legal person shall produce identity documents and the
instruments of proxies signed by the legal representative of the shareholder. Proxies
attending for shareholders appointed by the board of directors or executive authority of
the shareholder shall produce identity documents and the instrument of proxies signed
by the board of directors or executive authority of the shareholder and stamped with
company chop of the shareholder. Completed instruments of proxies shall be dated.
Article 92
The signature attendance record of the attendees of the shareholders’ general meeting
shall be prepared by the Company. Items such as name of the shareholders, identity
code, address, number of voting shares held or represented, name of the proxy and the
name of the shareholder being represented etc. shall be reflected in the attendance
record.
Article 93
Votes by a proxy given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the death or loss of capacity of the principal or revocation of the
proxy or of the authority under which the proxy was executed, or the transfer of the
share in respect of which the proxy is given, provided that no notice in writing of such
death, loss of capacity, revocation or transfer shall have been received by the Company
before the commencement of the meeting in relation to which the proxy is issued.
Article 94
The Company’s directors, supervisors and secretary of the Board should attend the
shareholders’ meeting. Senior management should sit in at the shareholders’ meeting.
Article 95
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The Company shall have a set of procedural rules for shareholders’ meeting detailing
the procedures regarding convening and voting at the shareholders’ meeting, including
notice, registration, consideration of motions, casting of votes, counting of votes,
announcement of voting results, mode of resolutions, preparation and signing of
minutes, public announcement and principles as relates to authorization.
Article 96
The board of directors and the supervisory committee should report to the shareholders
at the shareholders’ general meeting the work undertaken by them over the past year,
and each independent director shall also report on the carrying out of their duties.
Article 97
The resolutions of a shareholders’ general meeting are classified into ordinary
resolutions and special resolutions.
Ordinary resolutions of the shareholders’ general meeting shall be passed by more than
half of the voting rights held by the shareholders (including proxies) present at the
meeting.
A special resolution of the shareholders’ general meeting shall be passed by more than
two-thirds of the Company’s total voting rights held by the shareholders who are present
at the meeting (including proxies).
Article 98
The following matters shall be resolved by way of ordinary resolution of the
shareholders’ general meeting:
(1) work reports of the board of directors and the supervisory committee;
(2) profit distribution proposals and proposals for making up losses formulated by the
board of directors;
(3) elect and replace directors and supervisors other than employee representative
supervisors, and determine the remuneration and method of payment of the
directors and supervisors, excluding the dismissal of independent directors;
(4) the Company’s annual financial budget plans, final financial plans, annual reports,
balance sheets, profit and loss accounts and other financial statements;
(5) guarantees provided by the Company to the Company’s shareholders or the de facto
controllers;
(6) the Company’s business policies and investment plans;
(7) engagement or removal of the accounting firms responsible for performing regular
and statutory audits for the financial reports of the Company;
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(8) matters other than those which are required by the laws, administrative regulations
and these Articles of Association to be resolved by way of special resolutions.
Article 99
The following matters shall be resolved by way of a special resolution of the
shareholders’ general meeting:
(1) increase or reduction of the Company share capital;
(2) purchase of the Company’s shares because of the circumstances (1) and (2) as
required in Article 36 of these Articles of Association;
(3) issuance of Company’s bonds and any type of shares, warrants and other securities
as well as the listing;
(4) division, merger, dissolution and liquidation or change of the formation of the
Company;
(5) amendment of these Articles of Association of the Company;
(6) the acquisition or disposal by the Company of material assets or the granting of
guarantees within one year with a value exceeding 30% of the latest audited total
assets value;
(7) share incentive schemes;
(8) dismissal of independent directors;
(9) approve other material matters that have reached the standard of review of the
shareholders’ general meeting including but not limited to, the establishment of
corporate bodies, material external investments, material asset disposal and
settlement, material asset pledges, etc. Please see Article 139 for the criteria of
“material” referred to in this provision;
(10) other matters which are required by the laws, administrative regulations or these
Articles of Association, and matters which, according to an ordinary resolution of
the shareholders’ general meeting, may have a significant impact on the Company
and should require adoption by way of a special resolution.
Article 100
When shareholders (including proxies) vote at the shareholders’ general meeting, they
shall exercise their voting rights according to the number of voting shares with voting
rights attached they represent. Each share shall have one vote.
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The Company’s shares held by the Company shall not carry voting rights. Such shares
shall not be included in the total numbers of the voting rights represented by the
shareholders attending the meeting.
The board of directors, independent directors and certain qualified shareholders of the
Company may canvass the Company’s shareholders for votes at shareholders’ general
meetings.
Article 101
On a poll taken at a meeting, a shareholder (including his proxies) entitled to two or
more votes need not cast all his votes in the same way.
Article 102
When considering connected transactions at a shareholders’ general meeting, the
connected shareholders shall not participate in voting and the voting rights carried by
the shares held by the connected shareholders shall be not counted towards the total
number of shares entitled to vote.
When connected transactions are deliberated at the shareholders’ general meeting, the
chairman of the meeting shall explain the connected relationship and that the connected
shareholders shall abstain from voting. Each resolution in relation to the connected
transaction shall be deliberated in accordance with laws and regulations, regulatory
requirements and these Articles of Association.
Where any shareholder is, under the Listing Rules, required to abstain from voting on
any particular resolution or to vote only for or only against any particular resolution,
the votes of those shareholders or proxy in contravention thereof shall not be counted
towards the valid number of votes.
Article 103
Unless the accumulative voting system is adopted, the general meetings shall resolve
on all motions included in the agenda separately. Where different motions for the same
issue are proposed, such motions shall be voted on and resolved in the order of time in
which they are proposed. Unless the shareholders’ general meeting is adjourned or no
resolution can be made due to special reasons such as force majeure, voting of such
proposals shall neither be put on hold nor voting by-passed at the shareholders’ general
meeting.
Before a poll on the proposals is taken, persons may be invited to participate in the vote
counting and scrutiny. However, shareholders connected to the considered matters at
the shareholders’ general meeting or their proxies shall not participate in the vote
counting or scrutiny.
Article 104
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No amendment shall be made to a proposal when it is considered at a shareholders’
general meeting. Otherwise, the relevant amendment shall be regarded as a new
proposal and shall not be voted on at the shareholders’ general meeting.
Article 105
The shareholders’ general meeting shall vote by open ballot.
Article 106
More than half and no less than two independent directors shall have the right to propose
to the board of directors for holding an extraordinary general meeting and should do so
by written notice to the board of directors. With regard to the proposal made by the
independent director for holding an extraordinary general meeting, the board of
directors shall, in accordance with the laws, administrative rules and these Articles of
Association, give a written reply on whether to hold the extraordinary general meeting
within 10 days upon receipt of the proposal.
If the board of directors agrees to hold the extraordinary general meeting, it shall serve
a notice of such meeting within five days after the resolution is made by the board of
directors. If the board of directors does not agree to hold the extraordinary general
meeting, it shall give reasons and make an announcement in respect thereof, and the
independent directors shall report to CBIRC.
Article 107
The supervisory committee shall have the right to propose to the board of directors to
hold an extraordinary general meeting, and shall put forward its proposal to the board
of directors in writing. The board of directors shall, in accordance with the laws,
administrative regulations and these Articles of Association, give a written reply on
whether to hold the extraordinary general meeting or not within 10 days upon receipt
of the proposal.
If the board of directors agrees to hold the extraordinary general meeting, it shall serve
a notice of such meeting within five days after the resolution is made by the board of
directors. In the event of any change to the original proposal set forth in the notice, the
prior consent of the supervisory committee shall be obtained.
If the board of directors does not agree to hold the extraordinary general meeting or
fails to give a written reply within 10 days upon receipt of the proposal, tit shall be
regarded that the board of directors cannot perform or fails to perform the duty of
convening the extraordinary general meeting, and the supervisory committee may
convene and preside over the meeting by itself.
Article 108
Shareholders shall comply with the following procedures when proposing to convene
an extraordinary general meeting:
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(1) shareholders individually or collectively holding more than 10% of the
Company’s shares have the right to propose to the board of directors to convene
an extraordinary general meeting, and require the board of directors to reply in
writing within 10 days upon receipt of the request whether it agrees or not to
convene the extraordinary general meeting according to the laws, administrative
regulations and these Articles of Association of the Company;
(2) if the board of directors agrees to convene the extraordinary general meeting, it
shall serve a notice of such meeting within five days after the resolution is made
by the board of directors. In the event of any changes to the original proposal set
forth in the notice, the consent of the relevant shareholders shall be obtained.
(3) if the board of directors does not agree to convene the extraordinary general
meeting, or fails to give a written reply within 10 days upon receipt of the proposal,
shareholder(s) individually or collectively holding more than 10% of the
Company’s shares have the right to propose to the supervisory committee to
convene an extraordinary meeting. The proposal shall be made in writing.
(4) if the supervisory committee agrees to hold the extraordinary shareholders’
general meeting, it shall serve a notice of such meeting within five days after such
proposal is received. In the event of any change to the original proposal set forth
in the notice, the consent of the shareholders shall be obtained.
(5) if the supervisory committee fails to give notice of general meeting within the
specified period, the supervisory committee shall be regarded as not convening
and holding the shareholders’ general meeting, and the shareholders individually
or collectively holding 10% or more shares carrying voting rights on such
proposed meeting for over 90 consecutive days may convene the meeting on their
own accord.
Article 109
Where the supervisory committee or shareholders decide to convene shareholders’
general meetings by itself/themselves, it/they shall notify the board of directors in
writing and file on record with the relevant governing authority in accordance with the
applicable guidelines. The shareholding of the shareholders convening the general
meeting shall not be less than 10% prior to announcing the results of the general meeting.
Article 110
If the number of directors falls short of the minimum number required by the Company
Law or the unrecovered losses of the Company amount to one-third of the total amount
of its paid-up share capital and the board of directors fails to convene the shareholders'
meeting within the stipulated time, the supervisors or shareholders may convene a
shareholders' meeting according to the procedure set forth in Articles 107 and 108.
Article 111
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The general meeting shall be presided over by the chairman of the board of directors
who shall act as the chairman of the meetings. If the chairman is unable or has failed to
perform his duties, the executive director acting as vice chairman shall preside over and
act as the chairman of the meetings; in the event that the executive director acting as
vice chairman is unable or has failed to perform his duties, the non-executive director
acting as vice chairman shall preside over and act as the chairman of the meetings; in
the event that the non-executive director acting as vice chairman is unable or has failed
to perform his duties, a director shall be jointly elected by a simple majority of directors
to preside over and act as the chairman of the meetings.
A shareholders’ general meeting convened by the supervisory committee itself shall be
chaired and presided over by the chairman of the supervisory committee. If the
chairman of the supervisory committee cannot perform or fails to perform his duties,
the majority of the supervisors shall jointly elect a supervisor to chair the meeting.
A shareholders’ general meeting convened by the shareholders themselves shall be
presided by a representative elected by the convener. If the convener cannot elect a
chairman of the meeting, the shareholder attending the meeting that hold the most
voting shares (including the proxy) shall be the chairman and preside the meeting.
When the shareholders' general meeting is held and the chairman of the meeting violates
these Rules which makes it difficult for the shareholders’ general meeting to continue,
a person may be elected at the shareholders’ general meeting to act as the chairman of
the meeting, subject to the approval of more than half of the shareholders having the
voting rights who are present at the meeting.
Article 112
With regard to the shareholders’ general meeting convened by the supervisory
committee or shareholders on its/their own initiative, the board of directors and its
secretary shall offer cooperation. The board of directors shall provide a register of
shareholders as of the shareholding record date.
Article 113
The necessary expenses and cost for the shareholders’ general meeting convened by the
supervisory committee or the shareholders on its/their own initiative shall be borne by
the Company.
Article 114
The measures and procedures to nominate directors and supervisors other than those
representing employees are as follows:
(1) the board of directors and the supervisory committee may respectively nominate
the candidate for directors and supervisors to be elected from shareholders
within the headcount limit as provided in these Articles of Association and
according to the intended numbers to be elected.
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(2) the nomination committee shall preliminarily examine the qualifications and
conditions of the director candidates and submit the qualified candidates to the
board of directors for deliberation; the qualifications of the supervisor
candidates shall be deliberated by the supervisory committee. The nominees of
directors and supervisors shall submit a written proposal of the candidate
directors and the candidate supervisors to the shareholders’ general meeting.
The board of directors and the supervisory committee shall provide to the
shareholders the resume and brief conditions of the candidate directors and the
candidate supervisors;
(3) the shareholders’ general meeting shall vote on the candidates one by one.
Accumulative voting system may be adopted when electing directors and
supervisors at the shareholders’ general meeting. Accumulative voting system
must be adopted for the election of directors and supervisors when a single
shareholder of the Company (the shareholdings of connected shareholders and
any person acting in concert with him/her shall be calculated accumulatively)
holds more than 20% of the Company’s shareholding, and no more than 2
directors can be nominated by any single shareholder;
(4) in case of any need to add or change any director or supervisor, the board of
directors or the supervisory committee is responsible for proposing to the
shareholders’ general meeting the selection or change of a director or supervisor.
(5) where mandatory regulations in relation to the nomination of independent
directors are otherwise provided by laws, regulations, regulatory documents and
these Articles of Association, such regulations shall apply.
Article 115
Except for involving business secrets of the Company that cannot be disclosed, the
directors, supervisors and senior management shall make replies or explanations to the
inquiries and suggestions of shareholders on shareholders’ general meeting.
Article 116
The chairman of the meeting shall be responsible for determining whether a
shareholders’ resolution has been passed, such determination shall be final and
conclusive and shall be announced in the meeting and recorded in the minutes.
Article 117
If the chairman of the meeting has any doubts as to the result of a resolution which has
been put to vote at a shareholders’ general meeting, he may have the votes counted. If
the chairman of the meeting has not counted the votes, any shareholder present in person
or by proxy who objects to the result announced by the chairman of the meeting may,
immediately after the declaration, demand that the votes be counted and the chairman
of the meeting shall have the votes counted immediately.
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Article 118
If the votes are counted at the shareholders’ general meeting, the result shall be recorded
in the minutes.
Article 119
The shareholders’ general meetings shall keep minutes. Directors, supervisors, the
secretary to the board of directors, the convener or their representatives, and the
chairman of the meeting and the recorders attending the meeting shall sign the minutes
of the meeting.
The secretary of the board of directors shall be responsible for the minutes of
shareholders’ general meetings. The minutes shall set out the following:
(1) the date, time place and agenda of the meeting, and the name of the convener;
(2) the names of the chairman of the meeting, and the directors, supervisors, and
other senior management of the Company attending or present at the meeting;
(3) the number of shareholders and proxies attending the meeting, the total number
of voting shares they represent and the proportion of the domestic shares
shareholders (including by proxy) and the H shares shareholders (including by
proxy) to the total number of shares of the Company;
(4) the process of discussion in respect of each proposal, highlights of the proposals
considered which are proposed by the persons who speak at the meeting and the
results of the poll (the voting results of the domestic shares shareholders and the
H shares shareholders in respect of each resolution should also be recorded);
(5) details of the inquiries or recommendations of the shareholders, and the
corresponding response or explanations;
(6) the names of the counting officer and scrutinizer;
(7) other matters which, according to the shareholders’ general meeting and the
provisions of these Articles of Association, shall be recorded in the minutes of
the meeting.
Article 120
The convener shall ensure the truthfulness, accuracy and completeness of the minutes
of the meeting. The minutes of the meeting, together with the shareholders’ attendance
sheets and proxy forms, other valid information relating to other modes of resolution
shall be kept at the Company’s premises. Minutes of meetings shall be kept for ten years.
Article 121
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The resolutions of the shareholders’ general meeting shall be duly announced. In the
event that a proposal in connection with the meeting has not been adopted or the
resolutions of the preceding shareholders’ general meeting have been changed at the
current shareholders’ general meeting, the board of directors shall specify the same in
the announcement of the resolutions of the shareholders’ general meeting.
The resolutions shall be reported to the CBIRC by the Company within 30 days after
making by the shareholders’ general meeting.
Article 122
Newly appointed directors and supervisors shall effectively take office after the
shareholders’ general meeting on which the proposals to appoint the directors and
supervisors were passed and the approvals of their qualifications were obtained from
CBIRC.
Article 123
Where a proposal on cash dividends, bonus shares or increase of share capital by way
of transfer from capital reserves is passed, the Company shall implement the specific
scheme within two months upon conclusion of the shareholders’ general meeting.
Article 124
Copies of the minutes of meeting shall be available to any shareholder for inspection
free of charge during the business hours of the Company. If a shareholder requests for
a copy of the relevant minutes, the Company shall send a copy to him within seven days
after receiving payment of the reasonable charges.
CHAPTER 9: SPECIAL VOTING PROCEDURES FOR SHAREHOLDERS OF
DIFFERENT CLASSES
Article 125
Shareholders who hold different classes of shares shall be class shareholders.
Shareholders of different classes shall enjoy rights and assume obligations in
accordance with laws, administrative regulations and these Articles of Association.
Article 126
If the Company intends to change or abrogate the rights of class shareholders, it may
do so only after such change or abrogation has been approved by way of a special
resolution at the shareholders’ general meeting and by a separate shareholders’ meeting
convened by the affected shareholders of that class in accordance with Articles 128 to
132.
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Article 127
The rights of shareholders of a certain class shall be deemed to have been amended or
canceled in the following circumstances:
(1) to increase or decrease the number of shares of such class, or to increase or
decrease the number of shares of a class having voting rights, distribution rights
or other privileges equal or superior to those of the shares of such class;
(2) to effect an exchange of all or part of the shares of such class into shares of another
class, or to effect an exchange or create a right of exchange of all or part
of the shares of another class into the shares of such class;
(3) to remove or reduce rights to accrued dividends or cumulative dividends attached
to shares of such class;
(4) to reduce or remove a dividend preference or property distribution preference
during the liquidation of the Company attached to shares of such class;
(5) to add, remove or reduce share conversion rights, options, voting rights, transfer
rights, pre-emptive rights to rights issues or rights to acquire securities of the
Company attached to shares of such class;
(6) to remove or reduce rights to receive amounts payable by the Company in a
particular currency attached to shares of such class;
(7) to create a new class of shares with voting rights, distribution rights or other
privileges equal or superior to those of the shares of that class;
(8) to restrict or impose additional restrictions on the transfer of ownership of shares
of such class;
(9) to issue rights to subscribe for, or convert into, shares of such class or another
class;
(10) to increase the rights and privileges of shares of another class;
(11) to restructure the Company where the proposed restructuring will result in
different classes of shareholders having to bear liability to different extents; or
(12) to amend or cancel the provisions of these Articles of Association.
Article 128
Shareholders of the affected class, whether or not originally having the right to vote at
shareholders’ general meetings, shall have the right to vote at class meetings in respect
of matters referred to in items (2) to (8) or (11) to (12) of Article 127, except that
interested shareholders shall not have the right to vote at class meetings.
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For the purposes of the preceding paragraph, the term “interested shareholders” shall
have the following meanings:
(1) if the Company has made a buy-back offer to all shareholders in the same
proportion or has bought back its own shares through public trading on a securities
exchange in accordance with Article 37 hereof, the controlling shareholders as
defined in Article 67 hereof shall be “interested shareholders”;
(2) if the Company has bought back its own shares by agreement outside a securities
exchange in accordance with Article 37 hereof, holders of shares in relation to
such agreement shall be “interested shareholders”; or
(3) under a restructuring proposal of the Company, shareholders who will bear
liability in a proportion smaller than that of the liability borne by other
shareholders of the same class, or shareholders who have an interest in a
restructuring proposal of the Company that is different from the interest in such
restructuring proposal of other shareholders of the same class shall be “interested
shareholders”.
Article 129
Resolutions of class meeting may be passed only by more than two-thirds of the voting
rights of that class represented at the meeting in accordance with Article 128 hereof.
Article 130
When the Company is to hold a class meeting, it shall issue a written notice 45 days
prior to the meeting informing all the registered shareholders of that class of the matters
to be examined at the class meeting as well as the date and place of the meeting.
Shareholders who intend to attend the class meeting shall, within 20 days prior to the
day of the meeting, deliver a written reply to the Company indicating such intention.
If the number of shares carrying the right to vote at the meeting represented by the
shareholders intending to attend the meeting is more than half of the total number of
shares of that class carrying the right to vote at the meeting, the Company may hold the
meeting of shareholders of that class. If not, the Company shall within five days inform
the shareholders once again of the agenda, time and place of the meeting in the form of
a public announcement. Upon notification by public announcement, the Company may
hold the class meeting.
The quorum for a separate class shareholders meeting (other than an adjourned meeting)
to consider a variation of the rights of any class of shares shall be the holders of at least
one-third of the issued shares of that class.
Article 131
The notice of a class meeting needs to be delivered only to the shareholders entitled to
vote at that meeting.
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The procedures according to which a class meeting is held shall, to the extent possible,
be identical to the procedures according to which a general shareholders’ meeting is
held. Provisions of these Articles of Association relevant to procedures for the holding
of a shareholders’ general meeting shall be applicable to class meetings.
Article 132
In addition to holders of other classes of shares, holders of domestic shares and overseas
listed foreign shares shall be deemed to be shareholders of different classes.
The special voting procedures for approval by a class of shareholders shall not apply:
(1) where, as approved by way of a special resolution of the shareholders’ general
meeting, the Company issues, either separately or concurrently, domestic shares
and overseas listed foreign shares every 12 months, and the number of the
domestic shares and overseas listed foreign shares intended to be issued does not
exceed 20 percent of the issued and outstanding shares of the respective categories;
or
(2) where the plan for issuance of domestic shares and overseas listed foreign shares
upon the establishment of the Company is completed within 15 months after being
approved by the CSRC.
CHAPTER 10: BOARD OF DIRECTORS
Article 133
The board of directors shall compose of fifteen directors, which includes one chairman,
two vice chairmen, six executive directors, four non-executive directors and five
independent directors.
Article 134
A director is elected by the shareholders’ general meeting with a term of office of three
years. A director may serve consecutive terms if re-elected upon expiry of the term. The
shareholders’ general meeting shall not remove a director without due reason before the
expiry of the director's term of office.
During the term of each session of the board of directors, the number of replaced
directors each year shall not exceed one-third of the total number of directors. In the
event that an independent director has reached the end of his/her six-year term, the
director has resigned or becomes unable to fulfill his/her duty, the director was removed
due to violation of laws, administrative regulations and these Articles of Association,
the above restriction does not apply.
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The senior management can also be directors, but the total number of directors who are
also senior management shall not exceed one half of the total number of directors of the
Company.
The chairman of the board of directors and the vice chairman (or vice chairmen) of the
board of directors shall be elected and removed by more than half of all the directors.
The chairman of the board of directors and the vice chairman (or vice chairmen) of the
board of directors shall serve a term of three years and may serve consecutive terms if
reelected upon the expiration of their terms.
The directors are natural persons and need not be shareholders.
Article 135
A written notice of the intention to nominate a person for election as a director and a
written notice by that person expressly indicating his acceptance of such nomination
shall be given to the Company no earlier than the day after the dispatch of the notice of
the shareholders' general meeting and no later than seven days before the date of such
shareholders' general meeting, and the minimum period during which the notices shall
be given will be seven days.
Article 136
The term of a director’s office commences from the date of appointment and ends with
the term of the current board of directors.
Article 137
Subject to compliance with all relevant laws and administrative regulations, the
shareholders’ general meeting may by an ordinary resolution remove any non-
independent director before the expiration of his term of office, or remove any
independent director before the expiration of his term of office by way of a special
resolution. However, the director’s right to claim for damages under any contract shall
not be affected.
Article 138
The board of directors shall be accountable to the shareholders’ general meeting and
shall exercise the following functions and powers:
(1) to be responsible for convening shareholders’ general meetings and reporting its
work to the shareholders’ general meetings;
(2) to implement the resolutions of the shareholders’ general meeting;
(3) to determine the Company’s management and operation plans and investment
schemes;
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(4) to formulate the Company’s annual budgets and final accounts;
(5) to formulate the Company’s profits distribution plans and loss recover plans;
(6) to formulate plans of increasing or decreasing the Company’s registered capital,
and issuing corporate bonds or other securities, and listing plans;
(7) to draft plans for important acquisition or acquisition of the shares of the
Company because of the circumstances (1) and (2) as required in Article 36 of
these Articles of Association or the plans of merger, division, dissolution and
change of the formation of the Company;
(8) to determinate the setup of the Company’s internal management structure;
(9) to appoint and remove the Company’s senior management as nominated by the
chairman of the board of directors (CEO) and decide their remuneration, reward
and reprimand matters;
(10) to formulate the Company’s basic management system and regulations; to
formulate and enhance working mechanisms of the Company, such as internal
control, compliance, risk, development planning;
(11) to formulate proposals to amend these Articles of Association; to formulate
procedural rules of shareholders’ general meeting, procedural rules of the
board of directors and to consider the working rules of the special committees
of the board of directors;
(12) to manage the issues in respect of the Company’s information disclosure;
(13) to decide on issues in respect of the material investment, acquisition or sale of
assets, disposal and write-off of assets, asset mortgage, external guarantee,
entrusted financing, affiliated transactions, etc. as authorized by shareholders’
general meetings;
(14) to receive the work report of the Company’s CEO and supervise his/her work;
(15) to conduct an annual due diligence appraisal of the directors, and submit the due
diligence report of the directors to the shareholders’ general meeting and the
supervisory committee;
(16) to propose to shareholders’ general meetings the engagement or dismissal of the
accounting firms responsible for performing regular and statutory audits on the
financial reports of the Company;
(17) to select and engage an external auditor responsible for auditing the directors
and senior management of the Company;
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(18) to pass resolutions on purchase of the shares of the Company because of the
circumstances (3), (5) and (6) as required in Article 36 of these Articles of
Association;
(19) to exercise other powers as provided by laws, administrative rules or these
Articles of Association and as authorized by the shareholders’ general meeting.
All the above board resolutions shall be passed by over one half of the directors;
provided that the resolutions covered in items (6), (7) and (11) and in relation to the
granting of external guarantee shall be passed by over two-thirds of the directors.
The powers of the board of directors described in this Article shall be exercised
collectively by the board of directors. The statutory powers of the board of directors
shall generally not be delegated to the chairman of the board of directors, any director
or any other individual or institution. Where it is necessary, it shall be done by means
of resolution of the board of directors. The board of directors shall only delegate its
power once to a single specific matter, and shall not grant power generally or
permanently to any other institution or individual of the Company.
Article 139
The board of directors shall determine the scope of authorities in respect of external
investment, acquisition or sale of assets, disposal and write-off of assets, asset mortgage,
external guarantees, entrusted finance management and connected transactions, and
establish strict examination and decision making procedures. Material investment
projects shall be reviewed by experts and professionals and shall be subject to
shareholders’ approval at general meeting.
The “material investment projects” referred to above shall mean an investment project
where any of the applicable assets, consideration, profits, revenue or equity ratios as
prescribed by the Stock Exchange Listing Rules from time to time of which (the “5
ratios”) is over 25%, or an investment project where any of the transaction amount ratio
and net profit ratio (the “2 ratios”) as prescribed by SSE Listing Rules from time to time
of which is over 50%.
Any investment where any of the 5 ratios are below 25% or investments where any of
the 2 ratios are below 50% shall be determined by the board of directors as authorized
by the shareholder at general meeting.
Article 140
In disposing of fixed assets, where the sum of the expected value of the fixed assets to
be disposed of together with the value of the fixed assets which have been disposed of
within the four months preceding the proposal to dispose of these assets exceeds 33%
of the value of the fixed assets reflected by the latest balance sheet approved by the
shareholders’ general meeting, the board of directors shall not dispose of, or agree to
dispose of, such fixed assets without the prior approval of the shareholders’ general
meeting
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For the purposes of this Article, the term “disposal of fixed assets” shall include the
assignment of a certain interest in assets other than by way of guarantees.
The validity of transactions whereby the Company disposes of fixed assets shall not be
affected by the breach of the first paragraph hereof.
Article 141
The board of directors shall make presentations to the shareholders’ general meeting on
the non-standard audit opinion produced by the certified accountants on the Company’s
financial reports.
Article 142
The board of directors shall prepare procedural rules for board meetings so as to ensure
the working efficiency and scientific decision-making of the board of directors.
Article 143
The chairman of the board shall exercise the following functions and powers:
(1) to preside over shareholders’ general meetings and to convene and preside over
meetings of the board of directors;
(2) to procure and examine the implementation of resolutions of the board of
directors;
(3) to sign securities certificates issued by the Company;
(4) to sign important documents of the meetings of the board of directors and other
documents that require signature by the legal representative of the Company;
(5) to exercise the powers of legal representative;
(6) other functions and powers granted by the board of directors.
Article 144
The board of directors shall convene regular board meeting at least four times each year.
The meeting shall be convened by the chairman and all the directors and supervisors
shall be notified in writing 14 days prior to the meeting.
The chairman of the board of directors shall convene and preside over an extraordinary
board of directors meeting within 10 days upon the receipt of a proposal for such a
meeting where a meeting is:
(1) considered by the chairman of the board of directors to be necessary;
(2) jointly proposed by one-third or more of the directors;
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(3) proposed by the supervisory committee;
(4) proposed by the CEO; or
(5) proposed by the shareholders representing more than 10% of the shares with
voting rights of the Company.
Article 145
The board of directors may convene extraordinary board meeting and conduct the
voting via telecommunications. The 14-day prior notice requirement need not apply in
this situation provided that notice of such a meeting shall be delivered to the directors
and supervisors in a timely and effectively manner.
No meeting shall be convened by way of voting via telecommunications in respect of
any proposals voted by the board of directors in relation to the profit distribution plan,
remuneration plan, major investment and assets disposal, appointment and discharge of
senior management, and other proposals regarding the risk management of the
Company.
Article 146
The notice for a board of directors meeting shall include the following:
(1) the date and venue of the meeting;
(2) the time limit for the meeting;
(3) the reasons for and the proposed resolutions of the meeting; and
(4) the date of the notice.
Article 147
Unless otherwise required in these Articles of Association, the quorum for a board of
directors meeting shall be more than one half of the directors, including the directors
authorized to attend pursuant to Article 151.
Each director shall be entitled to one vote. Unless otherwise required in these Articles
of Association, resolutions of the board of directors shall be passed by more than half
of all the directors.
When the number of votes for and against a resolution is equal, the chairman of the
board shall not have a casting vote.
Voting at a board of directors meeting shall be by a show of hands.
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Article 148
Proposals at the meetings of the board of directors shall contain specific matters to
deliberate and vote on.
In principle, the board of directors at the meeting shall not vote on any proposal
unspecified in the notice of the meeting. When all directors of the Company
unanimously agree to exempt the flaw in procedures due to a special reason of an ad
hoc proposal made by an institution or individual qualified to propose, such proposal
can be deliberated and voted.
Article 149
A director who is connected to companies associated with matters to be resolved at the
board of directors meeting, such director shall not vote, on his own or other director(s)’s
behalf, on such resolution. Such board of directors meeting may be held with not less
than one half of the unconnected directors present and the resolutions thereof are to be
passed by not less than two thirds of the unconnected directors. If less than three
unconnected directors are present at the board of directors meeting, such matters shall
be submitted to the shareholders’ general meeting for approval.
The Board shall submit a report in respect of the status of connected transactions and
the implementation of management system on connected transactions to the general
meeting on an annual basis.
Article 150
An extraordinary board of directors meeting may be held and the directors may vote by
means of facsimile provided that the right of the directors to express their opinions can
be protected sufficiently, and the directors in attendance shall sign the resolution.
Article 151
Meetings of the board of directors shall be attended by the directors in person. Where a
director is unable to attend a board of directors meeting in person, he/she may authorize
another director in writing to attend the meeting on his/her behalf. The written power
of attorney shall set forth the name of the proxy, the matters being authorized, the scope
and duration of the authorization and shall be signed or chopped by the authorizing
director.
A director who attends a meeting on behalf of another director shall exercise the rights
of a director within the scope of authority granted. If a director fails to attend a meeting
of the board of directors and has not appointed a representative to attend on his behalf,
he shall be deemed to have waived his voting rights in respect of that meeting.
Article 152
The board of directors shall keep minutes of its decisions on the matters examined at its
meetings. The directors attending a meeting and the person taking minutes shall sign
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the minutes of that meeting. Directors present in the meeting shall have the right to add
explanatory descriptions to his/her representations at the meeting in the minutes. The
directors shall bear liability for the decisions of the board of directors. Where a
resolution of the board of directors violates laws, administrative regulations or these
Articles of Association, and thereby causing serious losses to the Company, the
directors who took part in the resolution shall be liable to the Company for damages.
However, where a director can prove that he expressed his opposition to such resolution
when it was put to be voted on, and that such opposition was recorded in the minutes
of the meeting, the director may be relieved from such liability.
The minutes of board meeting shall be kept as archives of the Company by the secretary of
the board of directors. The meeting files of the board of directors including the minutes of
board meetings shall be kept permanently.
Article 153
The minutes of board meetings shall include the following contents:
(1) the date, venue and convener of the meeting;
(2) the names of the directors present at the meeting, the directors authorized to
attend the meeting on behalf of others (the proxies);
(3) the agenda of the meeting;
(4) the major views expressed by the directors; and
(5) the voting methods and results for each motion, the voting results shall specify
the respective number of assenting, dissenting votes.
Article 154
The strategy and investment committee, audit and risk management committee,
nomination committee and remuneration committee set up under the board of
directors shall report to the board of directors.
CHAPTER 11: SECRETARY OF THE BOARD OF DIRECTORS
Article 155
The Company shall have a secretary of the board of directors. The secretary of the board
of directors shall be a member of the senior management of the Company and shall be
accountable to the board of directors.
Article 156
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The secretary of the board of directors shall be a natural person with the necessary
professional knowledge and experience. He shall be nominated by the chairman of the
board and appointed by the board of directors.
The circumstances under which a person shall not serve as a director of the Company
as stipulated in these Articles of Association shall also apply to the secretary of the
board of directors.
The main duties of the secretary of the board of directors are:
(1) to guarantee that the Company has complete organizational documents and
records;
(2) to organize the board meetings and shareholders’ general meetings, to be in charge
of the minutes of meetings and the safekeeping of meeting documents and records;
(3) to ensure that the Company prepares and submits the documents and reports
required by relevant authorities;
(4) to ensure that the Company’s register of shareholders is properly established and
to ensure that persons entitled to relevant records and documents of the Company
obtain such relevant records and documents in a timely manner;
(5) to be responsible for the coordination and organization of information disclosure
matters of the Company and to ensure that the information disclosures are timely,
accurate, lawful, true, and complete;
(6) to discharge other duties as required by these Articles of Association and other
related laws.
Article 157
A director or other senior management (except for CEO and CFO) of the Company may
also act concurrently as the secretary of the board of directors. A certified accountant of
an accounting firm or a lawyer of law firm which has been appointed by the Company
may not act concurrently as the secretary of the board of directors.
Where the office of the secretary of the board of directors is held concurrently by a
director, and a certain act is required to be done by the director and the secretary of the
board of directors separately, the person who concurrently holds the offices of director
and secretary of the board of directors may not perform such act in both capacities.
CHAPTER 12: SUPERVISORY COMMITTEE
Article 158
The Company shall have a supervisory committee.
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Article 159
The supervisory committee shall be composed of five persons, which includes one
shareholder representative supervisor, two independent supervisors and two employee
representative supervisors.
The term of office of a supervisor shall be three years. A supervisor may serve
consecutive terms if re-elected upon the expiration of his term. The shareholder
representative supervisor and independent supervisors shall be elected and dismissed at
the shareholders’ general meeting, and the employee representative supervisors shall be
elected and dismissed by the employees of the Company at the employees’
representative meeting or through other democratic means.
Article 160
The supervisory committee shall include one chairman of the supervisory committee.
The appointment or dismissal of the chairman of the supervisory committee shall be
determined by two-thirds or more of the members of the supervisory committee.
Where the chairman of the supervisory committee cannot perform or fails to perform
his/her duties, a supervisor elected by over half of the total number of the supervisors
shall convene and preside over the meeting of the supervisory committee.
Article 161
The Company’s directors and other senior management may not serve concurrently as
supervisors.
Article 162
The Committee shall hold at least one meeting every six months. The chairman of the
supervisory committee shall be responsible for convening meetings of the supervisory
committee. Supervisors may propose to convene an extraordinary meeting.
Article 163
The supervisory committee shall be accountable to the shareholders’ general meeting
and exercise the following functions and powers according to law:
(1) to submit written audit opinions on the regular reports prepared by the board of
directors of the Company;
(2) to examine the Company’s financial affairs;
(3) to supervise the act of the directors and the senior management who perform the
companies’ duties. To suggest the removal of the directors and senior
management who violate any laws, regulations, these Articles of Association or
resolutions passed in the shareholders’ general meeting;
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(4) to require a director or other senior management of the Company to rectify an
act if such act is harmful to the Company’s interests;
(5) to verify financial information such as financial reports, business reports, profit
distribution plans, etc. that the board of directors intends to submit to the
shareholders’ general meeting and, if in doubt, to be able to appoint a registered
accountant or practicing auditor in the name of the Company to assist in
reviewing such information;
(6) to propose the holding of extraordinary general meetings and hold and preside
over the shareholders’ general meetings in the event that the board of directors
fails to act in accordance with the regulation of the Company Law to hold and
preside the shareholders’ general meeting;
(7) to submit proposals to the shareholders’ general meetings and nominate
independent directors;
(8) to institute litigation against directors and senior management according to
relevant regulation of the Company Law;
(9) to provide supervision over the internal control, compliance, risk and the
formulation and implementation of development planning of the Company, and
if it is aware that the operation of the Company is improper, it can conduct
investigations; if necessary, it can employ professional institutions such as
accounting firms, law firms to assist his investigation work;
(10) other functions and powers provided for in these Articles of Association.
Supervisors may attend meetings of the board of directors and make inquiries and
suggestions to the resolutions of the board of directors. If necessary, the supervisory
committee may propose to convene joint meetings of the board of directors and the
supervisory committee, to make decisions on material matters in relation to corporate
governance.
Article 164
The method of discussions at the meetings of the supervisory committee shall be as
follows:
All supervisors shall be informed of the meeting of the supervisory committee in writing
not less than 10 days prior to the convening of the meeting. The supervisory committee
meeting shall be held only when more than half of supervisors are present. Each
supervisor has the right to one vote at the meeting. Resolutions of the meeting of the
supervisory committee shall be passed by an affirmative vote of more than two-thirds
of all of its members.
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The notice of the meeting shall contain the following content: the date, venue and
duration of the meeting, the purpose and the items to be considered as well as the date
on which the notice is despatched.
Proposals at the meetings of the supervisory committee shall have specific matters to
deliberate and vote on.
The supervisory committee enacts the procedural rules for the supervisory committee,
identify the method of negotiation and way of resolution in order to ensure working
efficiency and scientific decision-making.
Article 165
The reasonable expenses incurred by the supervisory committee in the employment of
professionals such as lawyers, registered accountants, practicing auditors, etc. in the
exercise of its functions and powers shall be borne by the Company.
Article 166
Minutes of the meeting shall be prepared by the supervisory committee recording
resolutions made in relation to the matters considered. The supervisors attending the
meeting and the person taking minutes shall sign the minutes of meeting. The
supervisors are entitled to add explanatory descriptions to their representations made at
the meeting. The minutes of meeting of the supervisory committee shall be kept as
archives of the Company at the domicile of the Company. The minutes of meeting shall
be kept for 10 years.
CHAPTER 13: EXECUTIVE COMMITTEE
Article 167
The Company sets up an executive committee, which is the highest execution
authority under the board of directors and is responsible for daily operation and
management as well as implementation of the resolutions at the shareholders’ general
meeting and the board of directors.
The chairman of the board of directors (CEO) shall lead the executive committee.
Article 168
The Company sets up one of CEO, engaged or discharged by the board of directors.
upon expiry of his term. The term of appointment of the CEO shall be three years, subject
to re-appointment
Article 169
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The CEO shall be accountable to the board of directors and shall exercise the following
functions and powers:
(1) to be in charge of the operation and management of the Company and to organize
the implementation of the decisions, resolutions, policies and development plans
of the board of directors and the supervisory committee, and report to the board
of directors;
(2) to organize the implementation of the Company’s annual business plans, budgets
and investment plans;
(3) to formulate the Company’s internal management organization.
(4) to devise the Company’s basic management system;
(5) to draw up the basic rules and regulations of the Company;
(6) to be responsible for submitting the annual work report and other reports to the
board of directors;
(7) to employ or dismiss management personnel whose employment or dismissal is
not subject to the approval of the board of directors and determine their
remuneration;
(8) to propose the convening of the extraordinary meeting of the board of directors;
(9) other matters as authorized by these Articles of Association and the board of
directors.
Article 170
The executive committee shall have terms of reference which shall be implemented
upon approval by the board of directors.
Article 171
The terms of reference of the executive committee include:
(1) the conditions, procedures and participants of the executive committee
meetings;
(2) the duties and division of work of the members of the executive committee;
(3) the application of assets and financial resources of the Company, authority to
enter into material agreements and the reporting system to the board of directors
and supervisory committee;
(4) other matters which the board of directors considers necessary.
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Article 172
The CEO shall attend meetings of the board of directors, but shall not have the right to
vote at such meetings if he is not also a director.
Article 173
In the exercise of their functions and powers, the CEO shall perform his duties in good
faith and with diligence and in accordance with laws, administrative regulations and
these Articles of Association.
Article 174
The Company shall have one President (COO). The President (COO) is elected for a
term of three years and may serve consecutive terms if re-elected upon the expiration
of his term.
Article 175
The President (COO) is accountable to the CEO, and shall exercise the following
functions and powers:
(1) to assist with the work of the CEO, and be responsible for implementing the daily
operations and management of the Company;
(2) responsible for convening the daily performance analysis meetings of the
Company;
(3) responsible for coordinating the daily management and administration of the
subsidiaries;
(4) responsible for coordinating the Company's internal and external relations;
(5) drafting the annual development plans, operation policy and annual business
plan of the Company;
(6) drafting the basic management systems of the Company;
(7) drafting specific rules and regulations of the Company;
(8) coordinate the operation of each department of the Company;
(9) review and approve all budgeted expenses and expenditures of the Company;
(10) formulate the salary, welfare, rewards and punishments of the Company's
employees and determine the engagement and dismissal of such employees;
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(11) responsible for developing the business and staff training;
(12) other duties as authorized by the CEO.
Article 176
The Company shall have one CFO. The CFO is elected for a term of three years and
may serve consecutive terms if re-elected upon the expiration of his term. The CFO is
accountable to the CEO, exercising the following duties:
(1) being responsible for accounting calculation and preparation of the financial reports,
setting up and maintaining the internal control system regarding financial
statements, ensuring the truthfulness of financial information;
(2) being responsible for financial management, including budget management, cost
control, fund planning, revenue distribution and assessment of operational
performance, etc.;
(3) being responsible for or taking participation in risks management and management
of solvency;
(4) taking participation in material operation management activities such as strategy
planning;
(5) reviewing and signing relevant data and reports for external disclosure, under laws,
administrative rules and relevant regulatory requirements;
(6) other duties which shall be performed pursuant to regulations of CBIRC or laws.
The CFO is authorized to acquire data, documents and information as required for
performing its duties, and authorized to attend any board meeting in relation to his duties.
Article 177
There shall be one chairman and five to nine vice chairmen in the executive
committee, the chairman of the board of directors (CEO) shall act as the chairman of
the executive committee.
CHAPTER 14: QUALIFICATION AND DUTIES OF THE COMPANY’S
DIRECTOR, SUPERVISOR AND OTHER SENIOR MANAGEMENT
Article 178
The Company’s directors, supervisors and senior management shall be of excellent
conduct and reputation, and possess the expertise and working experience relevant to
their duties, and meet the requirements specified by laws, regulations and the
59
qualifications specified by the CBIRC. None of the following persons may serve as a
director, supervisor, or other senior management of the Company:
(1) persons without capacity or with limited capacity for civil acts;
(2) persons who were sentenced for crimes of corruption, bribery, encroachment or
embezzlement of property or disruption of the social and economic order, where
five years have not lapsed following the serving of the sentence, or persons who
were deprived of their political rights for committing a crime, where five years
have not lapsed following the serving of the sentence;
(3) persons who acted as directors, or factory managers or managers of bankrupt or
liquidated companies or enterprises who bear personal liability for the bankruptcy
or liquidation of such companies or enterprises where three years have not lapsed
following the date of completion of such bankruptcy or liquidation;
(4) the legal representatives of companies or enterprises that had their business
licenses revoked as a result of infringing the law, and where such representatives
bear personal liability therefore and three years have not lapsed following the date
of revocation of such business licenses;
(5) persons with relatively heavy individual debts that have not been settled upon
maturity;
(6) persons against whom a case has been established for investigation by the judicial
authorities as a result of violation of the criminal law, and such case has not been
closed;
(7) persons who may not act as leaders of enterprises by virtue of laws and
administrative regulations;
(8) persons who are prohibited to participate in stock market by the CSRC, and such
prohibition period has not expired;
(9) non-natural persons; and
(10) persons ruled by a relevant organization in charge to have violated securities-
related regulations, where such violation involved fraudulent or dishonest acts and
five years have not lapsed following the date of the ruling.
Elections, appointments or employment of directors, supervisors or senior management
in violation of this Article shall be invalid. In the event that the circumstances as
stipulated in this Article arise during the term of appointment of directors, supervisors
or senior management, the Company shall dismiss the appointment.
Article 179
The independent directors of the Company shall be of excellent professional qualities
and reputation and meets the qualification standards with respect to independent
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directors specified by the laws, regulations, securities regulatory authorities where the
Company’s shares are listed as well as other regulatory authorities such as the CBIRC.
The following personnel shall not act as an independent director of the Company:
(1) company shareholder or a staff member of a Company shareholder.
(2) internal personnel of the Company.
(3) persons having interest relationships with connected persons of the Company or
the management staff of the company.
(4) other persons who are regulated by laws, administrative measures and these
Articles of Association.
Article 180
The validity of an act of a director or other senior management of the Company on
behalf of the Company towards a bona fide third party shall not be affected by any
irregularity in his current position, election or qualifications.
Article 181
Shareholders shall effectively manage personnel who simultaneously serve positions in
the shareholders and the Company to avoid conflicts of interests. Shareholders and non-
executive directors may not, for any reason or by any means, appoint executive director
or senior management to the Company, or, directly or indirectly, intervene in the legal
decision making and daily operation and management of the Company.
Article 182
In addition to obligations imposed by laws, administrative regulations or listing rules of
the securities exchange(s) on which shares of the Company are listed, the Company’s
directors, supervisors and other senior management shall owe the following obligations
to each shareholder in the exercise of the functions and powers granted to them by the
Company:
(1) not to cause the Company to act beyond the scope of business as stipulated in its
business license;
(2) to act honestly in the best interests of the Company;
(3) not to deprive the Company of its property in any way, including (but not limited
to) any opportunities that are favorable to the Company; and
(4) not to deprive shareholders of their individual rights or interests, including (but
not limited to) rights to distributions and voting rights, but not including the
restructuring of the Company submitted to and adopted by the shareholders’
general meeting in accordance with these Articles of Association.
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Article 183
The Company’s directors, supervisors and other senior management shall have an
obligation, in the exercise of their rights or discharge of their obligations, to perform
their due acts with care, diligence and skill as a reasonable and prudent person shall do
under similar circumstances.
Article 184
Unless provided by these Articles of Association or where authority has been granted
by the board of directors, a director shall not act on behalf of Company or the board of
directors in his individual name. In the event that a reasonable third party will consider
the director to be acting on behalf of the Company or the board of directors, the director
shall declare his position and identity in advance.
Article 185
The Company’s directors, supervisors and other senior management shall, in the
exercise of their duties, abide by the principles of honesty and creditability and shall
not place themselves in a position where there is a possible conflict between their
personal interests and their duties. This principle shall include (but not limited to) the
fulfillment of the following obligations:
(1) to act honestly in the best interests of the Company;
(2) to exercise powers within the scope of their functions and powers and not to act
beyond such powers;
(3) to personally exercise the discretion vested in him, not to allow himself to be
manipulated by another person and, not to delegate the exercise of his discretion
to another party unless permitted by laws and administrative regulations or with
the consent of the shareholders’ general meeting that has been informed of the
situation;
(4) to treat shareholders of the same class equally and to be impartial to
shareholders of different classes;
(5) not to conclude a contract or enter into a transaction or arrangement with the
Company except as otherwise provided in these Articles of Association or with
the consent of the shareholders’ general meeting that has been informed of the
situation;
(6) not to use Company property for his own benefit in any way without the consent
of the shareholders’ general meeting that has been informed of the situation;
(7) not to use his functions and powers as a means for accepting bribes or other
forms of illegal income, and not to illegally appropriate Company assets in
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any way, including (but not limited to) any opportunities that are favorable to
the Company;
(8) not to accept commissions in connection with Company transactions without
the consent of the shareholders’ general meeting that has been informed;
(9) to abide by these Articles of Association of the Company, perform his duties
faithfully, protect the interests of the Company and not to seek personal gain
with his position, functions and powers in the Company;
(10) not to compete with the Company in any way without the consent of the
shareholders’ general meeting that has been informed;
(11) not to embezzle Company funds or lend Company funds to others, not to deposit
Company assets in accounts opened in his own or in another’s name, and not to
use Company assets as security for the debts of the Company’s shareholders or
other personal debts; and
(12) not to disclose confidential information relating to the Company that was
acquired by him during his office without the consent of the shareholders’
general meeting that has been informed, and not to use such information except
in the interests of the Company; however, such information may be disclosed to
the court or other government authorities if:
(i) required by law;
(ii) required in the public interest; or
(iii)required in the own interest of such director, supervisor or other senior
management of the Company.
Article 186
A director, a supervisor or other senior management of the Company may not incite the
following persons or organizations (“connected persons”) to carry out matters that a
director, supervisor or other senior management may not themselves do:
(1) the spouse or minor child of a director, supervisor or other senior management of
the Company;
(2) the trustee of a director, supervisor or other senior management of the Company
or of any person referred in item (1) hereof;
(3) the partner of a director, supervisor, manager, deputy manager or other senior
management of the Company or of any person referred in items (1) and (2) hereof;
(4) the Company over which a director, supervisor or other senior management of the
Company, alone or jointly with any person referred to in items (1), (2) and (3)
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hereof or any other director, supervisor or other senior management of the
Company, has actual control;
(5) a director, a supervisor or other senior management of a company being
controlled as referred to in item (4) hereof; and
(6) the “associates” (as defined by the Stock Exchange Listing Rules from time to
time) of a director, a supervisor or member of senior management of the Company.
Article 187
The obligation of honesty and credibility of the Company’s directors, supervisors, CEO
and other senior management does not necessarily cease with the termination of their
office. Their confidentiality obligation in relation to the Company’s trade secrets shall
continue after the termination of their office. The term for which other obligations shall
continue shall be decided upon in accordance with the principle of fairness, depending
on the time lapse between the termination and the occurrence of the matter as well as
the circumstances and conditions under which the relationship with the Company
terminated.
Article 188
A director, supervisor or other senior management of the Company may be relieved
from liability for a specific breach of obligations by the shareholders’ general meeting
that has been informed of the situation, except in circumstances as specified in Article
66 hereof.
Article 189
If a director, a supervisor or other senior management of the Company has directly or
indirectly vested a material interest in a contract, transaction or arrangement concluded
or planned by the Company (except his employment contract with the Company), he
shall disclose the nature and extent of his interest to the board of directors at the earliest
opportunity, whether or not the matter is normally subject to the approval of the board
of directors.
Unless the interested director, supervisor or other senior management of the Company
has disclosed such interest to the board of directors as required under the first paragraph
hereof and the matter has been approved by the board of directors at a meeting in which
he was not counted in the quorum and had refrained from voting, the Company shall
have the right to void the contract, transaction or arrangement, except where the other
party is a bona fide party acting without knowledge of the breach of obligation by the
director, supervisor or other senior management concerned.
A director, a supervisor or other senior management of the Company shall be deemed
to have an interest in any contract, transaction or arrangement in which a connected
person of that director, supervisor or other senior management has an interest.
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Article 190
If a director, a supervisor or other senior management of the Company gives a written
notice to the board of directors before the conclusion of the contract transaction or
arrangement is first considered by the Company, stating that due to the contents as
stipulated in the notice, he has an interest in the contract, transaction or arrangement
that may subsequently be made by the Company, such director, supervisor, CEO or
other senior management of the Company shall be deemed for the purposes of the
preceding Articles of this Chapter to have declared his interest, insofar as attributable
to the scope stated in the notice.
Article 191
If a director fails to attend in person or appoint another director to attend the meeting of
the board of directors twice consecutively, he shall be deemed as unable to perform his
duties, and the meeting of the board of directors shall make a suggestion to the
shareholders’ general meeting for the director to be replaced.
A director may submit his resignation before his term of appointment expires. A director
planning to resign shall submit a written resignation to the board of directors. The board
of directors shall disclose the relevant circumstances within two days.
Where a director's resignation results in the number of directors falling below the
minimum number prescribed by law, the outgoing director shall continue to discharge
his duties as a director in accordance with laws, administrative regulations and these
Articles of Association until a new director is appointed in his place.
The remainder of the board of directors shall convene an extraordinary shareholder’s
general meeting as soon as possible, and elect another director to fill the vacancy
resulting from such resignation.
Save as provided in the previous paragraph, a director's resignation shall be effective
when the letter of resignation has been delivered to the board of directors.
A director whose term of appointment has not yet expired shall bear the liability for the
damages caused by demission at his own discretion.
Article 192
Prior to the expiry of the term of his/her office, an independent director may not be
removed without proper reasons. For independent directors who has lost his/her
independence but has not resigned or has otherwise become unsuitable to continue
his/her independent directorship, the Company shall remove him/her from office by
way of convening a shareholders’ general meeting.
The removal of an independent director shall be passed by two-thirds or more of
voting rights held by the shareholders who are present at the shareholders’ general
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meeting. The independent director shall have the right to make his defense and
statement prior to the vote.
Article 193
Aside from exercising the powers as a director, the independent directors shall also
provide an objective, impartial and independent opinion to the board of directors and
the shareholders’ general meeting on the following matters:
(1) material connected transactions;
(2) nomination, appointment and removal of the directors, as well as the engagement
and dismissal of the senior management;
(3) remuneration of the directors and the senior management;
(4) profit distribution plans;
(5) investment, lease, purchase and sale of assets, guarantee and other material
transactions which are outside the operation plan;
(6) other matters that may have a material effect on the interests of the Company, the
insured and the minority shareholders;
(7) other matters as stipulated by laws and regulations, regulatory requirements or
these Articles of Association.
The independent director shall submit written opinions to the Company and report to
the CBIRC when he/she abstains from voting of or votes against or has obstacles in
giving any opinion on the above matters.
Article 194
Aside from exercising the powers of a director as stipulated in other articles of these
Articles of Association, the independent directors shall have the following special
powers:
(1) conduct review on the fairness, internal review and implementation and impact
on the interest of the insured of material connected transactions, and the
independent directors shall issue their opinion in writing in relation to the
problematic connected transactions. If believed to be necessary by no less than
two independent directors, an intermediary agency may be engaged to submit an
independent financial advisory report as basis for judgment;
(2) more than half and no less than two independent directors may propose to the
board of directors to convene an extraordinary general meeting;
(3) more than two independent directors may propose to convene a meeting of the
board of directors;
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(4) to independently engage external auditors and consultants;
(5) other powers as stipulated by laws and regulations, regulatory requirements and
these Articles of Association.
The Company shall provide necessary conditions for independent directors to
effectively carry out the aforesaid powers.
Article 195
Supervisors shall comply with laws, administrative regulations and these Articles of
Association and shall fulfill his supervisory duties diligently and shall not take
advantage of his position to receive any bribe or illegal income, and shall not
misappropriate the assets of the Company.
Article 196
Where a supervisor fails to attend the Committee meetings in person twice
consecutively and does not appoint another supervisor to attend the meetings on his
behalf, the supervisor will be deemed as failing to perform his duties and the
shareholders’ general meeting or the employees' representative meeting shall remove
and replace the supervisor.
Article 197
A supervisor may submit his resignation before the expiration of his term, and the
provisions of these Articles of Association relevant to resignation of directors shall
also apply to supervisors.
Article 198
Where the term of appointment of supervisors has expired and no new appointments
are made in time resulting in the number of supervisors falling below the prescribed
number, the outgoing supervisors shall continue to discharge their duties in accordance
with the laws, administrative regulations and these Articles of Association until
appointments are made.
Article 199
The Company may not in any manner pay tax on behalf of its directors, supervisors,
and other senior management.
Article 200
To the extent permitted by applicable laws and regulations, the Company may:
(1) purchase and maintain insurance against any liability for the directors of the
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Company;
(2) the Company shall, under following circumstances, provide compensation
using the Company’s property, for liabilities resulting from self-defence in civil
or criminal litigation arising from a director’s acts or omissions made in his
capacity as director or a director being charged for acts or omissions made in
his capacity as director, unless the director violates the acts or omissions set
forth in Article 61 or Article 184 of these Articles of Association, or the
director's conducts involve a gross breach of duty, improper or fraudulent acts:
(i) judgments of the relevant litigation are in favor of the director;
(ii) the director is adjudged to be innocent in the judgments of relevant
litigations; or
(iii)if there is any application for exemption of act or omission herein which is
pursuant to law and has been granted by the court.
Article 201
The Company may not directly or indirectly provide a loan or loan security to its
directors, supervisors or other senior management, those of its parent company, or
connected persons of the above-mentioned persons.
The preceding paragraph shall not apply to the following circumstances:
(1) The provision of a loan or loan security by the Company to its subsidiary;
(2) The provision of a loan or loan security or other funds by the Company to a
director, a supervisor or other senior management of the Company under an
employment contract approved by the shareholders’ general meeting, so as to
enable him to pay the expenses incurred for a purpose in relation to the Company
or for the performance of his Company duties; and
(3) The provision of a loan or loan security by the Company to a relevant director, a
supervisor or other senior management of the Company or to a connected person
thereof on normal commercial terms, if the ordinary business scope of the
Company includes the lending of money or the provision of loan security.
Article 202
A loan provided by the Company in violation of the preceding Article shall be
immediately repayable by the recipient of the loan, regardless of the terms of the loan.
Article 203
The Company may not be forced to perform a loan security provided by the Company
in violation of the first paragraph of Article 197, except:
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(1) when the loan is provided to a connected person of a director, a supervisor, the
CEO or other senior management of the Company or its parent company, the
loan provider is not aware of the circumstances; and
(2) the collateral provided by the Company has been lawfully sold by the loan
provider to a bona fide purchaser.
Article 204
For the purposes of the preceding Articles of this chapter, the “security” shall include
an act whereby a guarantor assumes liability or provides property to guarantee or secure
the performance of obligations by an obligor.
Article 205
If a director, a supervisor or other senior management of the Company breaches his
obligations to the Company, the Company shall, in addition to any rights and remedies
available under laws and administrative regulations, have a right to:
(1) require the relevant director, supervisor or other senior management to
compensate for the losses sustained by the Company as a consequence of his
dereliction of duty;
(2) rescind any contract or transaction concluded by the Company with the relevant
director, supervisor or other senior management and any contract or transaction
with a third party where such third party is aware or shall be aware that the
director, supervisor or other senior management representing the Company was
in breach of his obligations to the Company;
(3) require the relevant director, supervisor or other senior management to surrender
the gains derived from the breach of his obligations;
(4) recover any funds received by the relevant director, supervisor or other senior
management that shall have been received by the Company, including (but not
limited to) commissions; and
(5) require the relevant director, supervisor or other senior management to return
any interest accrued or could have accrued on funds which should have been
paid to the Company.
Article 206
The Company shall enter into a written contract with each director and supervisor of
the Company concerning his emoluments. Such contracts shall be approved by the
shareholders’ general meeting before it is entered into. The above-mentioned
emoluments shall include:
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(1) emoluments in respect of his service as a director, supervisor or senior
management of the Company;
(2) emoluments in respect of his service as a director, supervisor or senior
management of a subsidiary of the Company;
(3) emoluments otherwise in connection with the management of the Company or
any subsidiary thereof; and
(4) funds as compensation for loss of office or retirement for the aforementioned
directors and supervisors.
A director or supervisor may not sue the Company for benefits due to him on the basis
of the above-mentioned matters, except under a contract as mentioned above.
Article 207
The Company shall specify in the contract concluded with a director or supervisor of
the Company concerning his emoluments that in the event of a takeover of the Company,
a director or supervisor of the Company shall, subject to prior approval of the
shareholders’ general meeting, have the right to receive compensation or other funds
obtainable for loss of office or retirement.
For the purposes of the preceding paragraph, the term “a takeover of the Company”
shall refer to any of the following circumstances:
(1) Anyone making a general offer to all the shareholders; or
(2) Anyone making a general offer with the purpose of making offeror a controlling
shareholder as defined in Article 67 hereof.
If the relevant director or supervisor fails to comply with this Article, any fund received
by him shall belong to those persons who have sold their shares as a result of their
acceptance of the above-mentioned offer, and the expenses incurred in the distribution
of such funds on a proportional basis shall be borne by the relevant director or
supervisor and may not be paid out of such fund.
CHAPTER 15: FINANCIAL AND ACCOUNTING SYSTEMS, DISTRIBUTION
AND AUDITING OF PROFITS
Article 208
The Company shall formulate its own financial and accounting systems in accordance
with Insurance laws and regulations, relevant laws, administrative regulations and PRC
accounting standards formulated by the State Council’s department in charge of finance.
Article 209
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The Company's fiscal year starts on January 1 and ends on December 31.
Article 210
The Company shall within 3 months from the end of each financial year submit and
report its financial account report to the CSRC and the Stock Exchange, and shall
submit and report its interim financial account report to appointed authorities of the
CSRC and the Stock Exchange within 2 months from the end of the first 6 months of
each financial year, and shall submit and report quarterly financial account reports to
the appointed authorities of the CSRC and the Stock Exchange within one month from
the end of the first 3 months and 9 months of each financial year respectively.
The above financial reports shall be prepared according to the regulations of relevant
laws, administrative and departmental regulations.
Article 211
The Company’s annual financial reports shall be examined and verified according to
laws.
The Company's financial reports shall be prepared in accordance with laws and
regulations.
The Company’s financial reports shall include the following accounting statements and
schedules:
(1) balance sheet;
(2) profit statement;
(3) profit distribution statement;
(4) cash flow statement;
(5) notes appended to financial statement.
Article 212
The board of directors of the Company shall place before the shareholders at each
annual shareholders’ general meeting such financial reports that the relevant laws,
administrative regulations and regulatory documents promulgated by the local
government and the authorities-in-charge require the Company to prepare.
Article 213
The financial reports of the Company shall be made available for inspection at the
Company by shareholders twenty (20) days prior to an annual shareholders’ general
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meeting. Each shareholder of the Company shall have the right to obtain a copy of the
financial reports referred to in this chapter.
The Company shall deliver or send the said reports to each shareholder of overseas
listed foreign shares by prepaid mail at the recipient’s address shown in the register of
shareholders no later than 21 days prior to an annual shareholders’ general meeting.
Article 214
The financial statements of the Company shall be prepared not only in accordance with
China’s accounting standards, laws and regulations but also in accordance with
international accounting standards or the accounting standards of the place(s) outside
the People’s Republic of China where shares of the Company are listed. If there are any
major differences in the financial statements prepared in accordance with these two sets
of accounting standards, such differences shall be stated in notes appended to such
financial statements. For purposes of the Company’s distribution of after-tax profits in
a given fiscal year, the smaller amount of after-tax profits shown in the above-
mentioned two kinds of financial statement shall apply.
Article 215
Interim results or financial information published or disclosed by the Company shall be
prepared in accordance with PRC accounting standards, laws and regulations as well as
international standards or the accounting standards of the place(s) outside the People’s
Republic of China where shares of the Company are listed.
Article 216
The Company may not establish any other account books other than the statutory
account books. The assets of the Company shall not be deposited in an account opened
under any personal name.
Article 217
The profits after tax of the Company shall be distributed in the following sequence:
(1) cover losses in the previous year;
(2) allocate 10% to statutory revenue reserve;
(3) allocate to discretionary revenue reserve;
(4) pay dividends to shareholders.
When the accumulated statutory revenue reserve exceeds 50 percent of the Company's
registered capital, the Company may cease to make such allocation. If the statutory
revenue reserve is not sufficient to cover the losses made in the previous year, the profits
of the current year shall be used to cover such losses before allocation to the statutory
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revenue reserve is made in accordance with the provisions of the previous paragraph.
The decision on whether to make any allocation of profit after tax to the discretionary
revenue reserve, after making allocation to the statutory revenue reserve, is subject to
the resolution at general meetings.
The profits after tax of the Company, after covering the losses and making allocation to
the revenue reserve, shall be distributed to the shareholders in accordance with their
proportion of shareholdings in the Company.
If it is resolved at the general meeting to distribute profit to shareholders before covering
the losses and making allocation to statutory revenue reserve in violation to the
provisions of the previous paragraph, the shareholders shall return such distributed
profits to the Company.
The shares held by the Company shall not participate in the profit distribution.
The Company shall attach importance to the reasonable investment returns of investors
in terms of its profit distribution. The profit distribution policy of the Company shall
maintain its continuity and stability. The accumulated profit to be distributed in cash for
any three consecutive years shall not be less than 30% of the average annual
distributable profit realized in the three years, provided that the annual distributable
profits of the Company (namely profits after tax of the Company after covering the
losses and making contributions to the revenue reserve) are positive in value and such
distributions are in compliance with the prevailing laws and regulations and the
requirements of regulatory authorities for solvency ratio. In determining the specific
ratio of distribution of cash dividend, the Company shall take into account its profit,
cash flow, solvency and operation and business development requirements. The board
of directors of the Company shall be responsible for formulating and implementing a
distribution plan according to the provisions of these Articles of Association.
In preparing profit distribution plans, the board of directors of the Company shall listen
and absorb views and advice from shareholders (in particular, the minority
shareholders), independent directors and independent supervisors through various ways.
Independent directors of the Company shall express their independent opinions on the
profit distribution plans. When a specific cash dividends distribution plan is put forward
for consideration at a general meeting, a variety of channels shall be provided for
communication and opinion exchange with shareholders (in particular, the minority
shareholders), whose opinions and demands shall be fully heard and prompt response
shall be given to any issues the minority shareholders are concerned.
Where adjustment to our profit distribution policy is required due to the applicable
national laws and regulations and new rules promulgated by the CSRC regarding profit
distribution policies of listed companies or significant changes in the external business
environment and/or operating situations of the Company, it shall be done for the purpose
of safeguarding the shareholders' interests and in strict compliance with the decision-
making process. To this end, the board of directors of the Company shall work out an
adjustment plan based on the operating situations of the Company and the relevant
regulations of the CSRC, and then submit the same to the general meeting for
consideration and approval. Implementation of the adjustment plan is conditional upon
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approval by shareholders (including their proxies) holding more than two-thirds of
voting rights present at the general meeting.
Article 218
The revenue reserve of the Company shall be used to cover the Company’s losses,
expand its production and operation, or be converted to increase the Company’s capital.
However, the capital revenue reserve shall not be used to cover losses of the Company.
.
Article 219
Where a resolution of the shareholders' general meeting of the Company resolves to
convert the revenue reserve into share capital, the Company shall issue new shares to
the existing shareholders in proportion to their respective shareholdings. When
converting the statutory revenue reserve into share capital, the balance of such revenue
reserve shall not be less than 25% of the registered capital before the conversion.
Article 220
The capital common reserve fund shall include the following funds:
(1) The premiums obtained from the issue of shares in excess of the par value; and
(2) Other revenue required by the State Council’s department in charge of finance
to be included in the capital common reserve fund.
Article 221
Unless otherwise resolved at the shareholders’ general meetings, the Directors may
distribute interim dividends if so authorized by the shareholders' general meeting.
Unless otherwise regulated by laws and regulations, the amount of interim dividend
shall not be more than 50% of the distributable profit in the interim profit and loss
account of the Company.
Article 222
The Company may distribute dividends in the following forms:
(1) Cash; and/or
(2) Shares.
Article 223
After the resolution regarding distribution of profits has been approved at the general
meeting of the Company, the board of directors shall within 2 months after the general
meeting complete the distribution of dividends (or shares).
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Where the Company makes payment of cash dividends and other amounts to the holders
of domestic shares, the payment shall be calculated and declared in Renminbi and be
paid in Renminbi within two months after declaration of the dividends. Where the
Company makes payment of cash dividends and other amounts to the holders of foreign
investment shares, the payment shall be calculated and declared in Renminbi and be
paid in Renminbi within two months after declaration of the dividends.
Where the Company makes payment to holders of foreign investment shares in foreign
currency, the foreign currency shall be arranged in accordance with the relevant state
foreign exchange regulations. Any amount paid up in advance of calls on any share may
carry interest but shall not entitle the holder of the share to participate in respect thereof
in a dividend subsequently declared.
In relation to the power to forfeit unclaimed dividends under the third paragraph of this
Article, that power shall not be exercised until six years or more after the date of
declaration of the dividend.
Article 224
The Company shall appoint recipient agents for holders of overseas listed foreign shares
to collect on behalf of the relevant shareholders the dividends distributed and other
funds payable in respect of foreign investment shares listed outside the People’s
Republic of China.
The recipient agents appointed by the Company shall meet the requirements of the laws
of the place(s), or the relevant regulations of the securities exchange(s), where the shares
are listed.
In relation to the sending of dividend warrants by post, the Company shall have the right
to cease sending dividend warrants by post if such warrants have been left uncashed
after having been sent twice consecutively. Such power may be exercised after the first
occasion on which such a warrant is returned undelivered.
The Company has the right to take back and sell the shares of a shareholder who is
untraceable under the following circumstances:
(1) during a period of 12 years, at least three dividends in respect of the shares in
question have become payable by the Company and no dividend has been
claimed during that period; and
(2) on expiry of the 12 years, the Company gives notice of its intention to sell the
shares by way of an advertisement published in the newspapers and notifies the
Hong Kong Stock Exchange of such intention.
The recipient agents appointed by the Company for holders of H shares shall each be a
company registered as a trust company under the Hong Kong Trustee Ordinance.
Article 225
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The Company shall take out security funds, insurance security funds and different types
of insurance liability reserves in accordance with relevant national regulations. If the
Company’s solvency fails to meet the regulatory requirements, the Company shall not
distribute profits to its shareholders.
Article 226
The Company shall implement an internal audit system and employ internal auditors to
perform internal audit and supervision on the financial revenue, expenditure and
operating activities of the Company.
Article 227
The internal audit system and the duties of the auditors of the Company shall be
implemented subject to the approval of the board of directors. The person in charge of
the audit shall be responsible to and report to the board of directors.
Article 228
The Company shall perform audit on the senior management of the Company when
they leave their positions.
CHAPTER 16: BASIC MANAGEMENT SYSTEM OF THE COMPANY
Article 229
The Company shall formulate various basic management systems, including but not
limited to, connected transactions, information disclosure, internal control compliance
and internal audit in accordance with the laws, regulations and requirements of
securities regulatory authorities where the Company’s shares are listed as well as other
regulatory authorities such as the CBIRC.
Article 230
The Company shall regularly review and update the above basic management systems in
accordance with the laws, regulations and requirements of securities regulatory authorities
where the Company’s shares are listed as well as other regulatory authorities such as the
CBIRC (as amended from time to time).
CHAPTER 17: NOTICE AND ANNOUNCEMENT
Article 231
The notice of the Company may be sent out in the following manner:
(1) delivered by hand;
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(2) delivered by post;
(3) by announcement;
(4) sent by facsimile;
(5) other forms stipulated in these Articles of Association.
Article 232
The notice sent by the Company in the form of public announcement shall be deemed
to have been received by all of the relevant personnel once such a public announcement
has been published.
For matters where announcements shall be made in accordance with the laws,
regulations and requirements of securities regulatory authorities where the Company’s
shares are listed as well as other regulatory authorities such as the CBIRC or made
pursuant to resolutions of the shareholders’ general meetings or of the board of directors
or the supervisory committee, the Company shall designate the media recognized by
the regulatory authorities such as the CBIRC and securities regulatory authorities where
the Company’s shares are listed to publish and disclose announcements and information.
Article 233
When a Company notice is served by hand, a return receipt shall be signed (or stamped)
by the receiver, and the date of signature by the receiver shall be the service date; when
served by mail, the service date shall be the third business day after the sending date.
Where a Company notice is published by way of announcement, the service date shall
be the date when the announcement was first published. Where a Company notice is
served by way of facsimile, the service date shall be the date the facsimile was sent out,
and shall be evidenced by the facsimile report.
Article 234
A meeting and the resolutions adopted thereat shall not be invalidated as a result of the
accidental omission to give notice of the meeting to, or the failure of receiving such
notice by, a person entitled to receive such notice.
CHAPTER 18: EMPLOYMENT OF ACCOUNTING FIRM
Article 235
The Company shall employ an independent accounting firm that complies with relevant
state regulations to perform audit of the annual financial reports and other financial
reports of the Company, verification of the net assets and provide other consultation
services regarding the relevant business.
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Article 236
The term of employment of an accounting firm employed by the Company shall be from
the end of the annual shareholders’ general meeting of the Company until the end of the
next annual shareholders’ general meeting. Such employment can be renewed.
Article 237
An accounting firm employed by the Company shall have the following rights:
(1) The right of access at all times to the account books, records or vouchers of the
Company and the right to require directors and other senior management of the
Company to provide relevant information and explanations;
(2) The right to require the Company to take all reasonable measures to obtain from
its subsidiaries the information and explanations necessary for the accounting
firm to perform its duties; and
(3) The right to attend shareholders’ general meetings and to receive a notice or
other information concerning any meeting which any shareholder has a right to
receive, and to be heard at any shareholders’ meeting on any matter which
relates to it as the accounting firm of the Company.
Article 238
If the position of accounting firm becomes vacant, the board of directors may appoint
an accounting firm to fill such vacancy before a shareholders’ general meeting is held.
However, if there are other accounting firms holding the position as an accounting firm
of the Company while such vacancy still exists, such accounting firms may continue to
act.
Article 239
The shareholders’ general meeting may, by means of an ordinary resolution, dismiss
any accounting firm prior to the expiration of its term of employment, notwithstanding
anything in the contract between the accounting firm and the Company, but without
prejudice to such accounting firm’s right, if any, to claim damages from the Company
in respect of such dismissal.
Article 240
The remuneration or method of remuneration of an accounting firm shall be decided by
the shareholders’ general meeting. The remuneration of an accounting firm employed
by the board of directors shall be determined by the board of directors.
Article 241
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The employment, dismissal or refusal of the renewal of the employment of an
accounting firm shall be decided by the shareholders’ general meeting and reported to
the CSRC for record.
Where a shareholders’ general meeting is proposed to pass a resolution to appoint an
accounting firm other than an incumbent accounting firm, to fill any vacancy in the
office of the accounting firm, or to re-appoint an accounting firm which was appointed
by the board of directors to fill a causal vacancy, or to remove an accounting firm before
expiry of its term of office, the following provisions shall apply:
(1) A copy of the appointment or removal proposal shall be sent before the notice
of shareholders’ general meeting is issued to the accounting firm proposed to be
appointed or proposing to leave its post or to the accounting firm which has left
its post in the relevant fiscal year. References to "leaving" herein include leaving
by removal, resignation and retirement.
(2) If the accounting firm leaving its post makes representations in writing and
requests the Company to give notice of such representations to the shareholders,
the Company shall take the following measures unless it has received the
representations too late:
(i) Elaborate the representations made by the accounting firm leaving its post
in any notice given to shareholders for the purpose of passing such
resolution; and
(ii) Attach a copy of the representations to the notice and deliver it to the
shareholders in the manner stipulated in these Articles of Association.
(3) If the Company fails to circulate the accounting firm’s representations in the
manner set out in the second paragraph of this Article, such accounting firm may
require the representations to be read out at the meeting and can make further
complaints;
(4) The accounting firm which has left its post shall be entitled to attend the
following meetings:
(i) The shareholders’ general meeting at which its term of office would
otherwise have expired;
(ii) The shareholders’ general meeting at which it is proposed to fill the vacancy
caused by its removal;
(iii)The shareholders’ general meeting, which is convened as a result of its
voluntary resignation.
The leaving accounting firm shall have the right to receive all notices of, and other
information relating to any such meeting, and to speak at any such meeting which it
attends on any affair which concerns it as the former accounting firm of the Company.
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Article 242
When the Company dismisses or does not renew the employment of an accounting firm,
it shall give a notice to the accounting firm 10 days in advance. The accounting firm
shall have the right to present its views before the shareholders’ general meeting. Where
an accounting firm tenders its resignation, it shall inform the shareholders’ general
meeting of whether there is any irregularity in the Company.
An accounting firm may resign from its office by way of depositing at the Company’s
domicile a resignation notice in writing which shall become effective on the date of
such deposit or on such later date as may be stipulated in such notice. Such notice shall
contain the following statements:
(1) A statement to the effect that there are no circumstances connected with its
resignation which it considers necessary to be explained to shareholders or
creditors of the Company; or
(2) A statement of any such circumstances as it considers necessary to be
explained.
Where a notice is deposited in accordance with the preceding paragraph, the Company
shall send a copy of the notice to the relevant authorities within 14 days. If the notice
contains a statement referred to in item (2) of the preceding paragraph, a copy of such
statement shall be placed at the Company for shareholders’ inspection. The Company
shall also send a copy of such statement by prepaid mail to every holder of overseas
listed foreign shares at the address registered in the register of shareholders.
Where the accounting firm’s notice of resignation contains a statement of any
circumstances it considers necessary to be explained, it may require the board of directors
to convene an extraordinary shareholders’ general meeting for the purpose explaining
the circumstances connected with its resignation.
CHAPTER 19: MERGER AND DIVISION OF THE COMPANY
Article 243
The Company can undergo mergers and divisions according to the law.
Article 244
The merger or division of the Company shall require a proposal by the board of directors.
After such proposal has been adopted in accordance with the procedures specified in
these Articles of Association, it shall be reported to the CBIRC for approval.
Shareholders opposing such proposal on the merger or division of the Company shall
have the right to require the Company or shareholders that are in favor of such proposal
to purchase their shares at a fair price. The contents of resolutions approving the merger
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or division of the Company shall be compiled in a special document for inspection by
shareholders.
Holders of foreign investment shares listed in Hong Kong shall be served copies of the
above-mentioned document by mail to the address registered in the register of
shareholders.
Article 245
Merger of the Company may take the form of merger by absorption and merger by new
establishment.
In the case of a merger, parties to the merger shall execute a merger agreement, and
shall prepare the balance sheets and a schedule of assets. The Company shall notify the
Company's creditors within a period of 10 days on which the resolution to proceed with
the merger is passed, publish at least three announcements on the merger in newspaper
within 30 days of that date.
Upon completion of the merger, the disposal of the assets, the rights, the obligations of
each part, shall be regulated clearly through signing a contract.
After the merger, the rights and the obligations of each part shall be assumed by the
company in existence or the newly established company after the merger.
Article 246
If the Company is to be divided, its property shall be divided accordingly.
For the division of a company, the parties to the division shall enter into a division
agreement and prepare balance sheets and an assets list. The Company shall notify its
creditors within a period of 10 days from the date on which the resolution to proceed
with the division is passed and publish at least three announcements on the division in
newspaper within 30 days of that date.
Debts owed by the Company prior to the division shall be assumed by the companies
in existence after the division in relation to the relevant responsibility, except different
provisions in the agreement entered into between creditors and the Company prior to
the division.
Article 247
Creditors shall, within a period of30 days commencing from the date of receiving the
written notice or within a period of 45 days commencing from the date of the first
announcement for those who did not receive a written notice, have the right to claim
full repayment or provision of a corresponding guarantee from the Company. The
Company shall not proceed with the merger or the division if it fails to repay its debts
in full or to provide corresponding guarantee.
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Article 248
The board of directors shall take necessary measures to protect the lawful rights and
interests of the shareholders that oppose the proposals for the merger or division of the
Company.
Article 249
Where the merger or division of the Company results in a change in its registered
particulars, such change shall be registered with the Company registry according to law.
Where the Company is dissolved, it shall cancel its registration according to law. Where
a new company is established, its establishment shall be registered according to law.
CHAPTER 20: DISSOLUTION AND LIQUIDATION OF THE COMPANY
Article 250
The Company shall be dissolved and liquidated according to law if:
(1) the shareholders’ general meeting resolves to dissolve the Company;
(2) dissolution is necessary as a result of the merger or division of the Company;
(3) the Company is declared bankrupt according to law because it is unable to pay
its debts as they fall due;
(4) the business license of the Company is lawfully dismissed or countermanded or
if the Company is ordered to be closed down; or
(5) there is severe difficulty in the operation and management of the Company, and
the continued existence of the Company will have material prejudice to the
interests of the shareholders and there is no other way to resolve, shareholders
who hold an aggregate of over 10% of the whole voting rights can seek the
People’s Court to dissolve the Company.
The effectiveness of the dissolution shall be subject to the approval by CBIRC, and
liquidation shall be performed under the supervision and guidance of the CBIRC.
Article 251
Where the Company is to be dissolved pursuant to sub-paragraphs (1), (3), (4) or (5) of
the preceding Article, it shall establish a liquidation committee within 15 days. The
members of such liquidation committee shall be determined by the shareholders’
general meeting by way of an ordinary resolution. If the liquidation committee is not
established within the prescribed period, the creditors can apply for the People’s Court
to appoint the relevant officers to establish the liquidation committee to carry out the
liquidation.
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Where the Company is to be dissolved pursuant to sub-paragraph (2) of the preceding
Article, liquidation shall be carried out by the parties to the merger or division in
accordance to the agreements reached at the time of merger or division.
Article 252
If the board of directors decides that the Company shall be liquidated (except for
liquidation as a result of company’s declaration of bankruptcy), the notice of the
shareholders’ general meeting convened for such purpose shall include a statement to
the effect that the board of directors has made full inquiry into the position of the
Company and that the board holds the opinion that the Company can repay its debts in
full within 12 months after the commencement of liquidation.
The functions and powers of the board of directors shall terminate immediately after
the shareholders’ general meeting has adopted a resolution to carry out the liquidation.
The functions and powers of the CEO shall terminate immediately after the
establishment of a liquidation committee.
The liquidation committee shall take instructions from the shareholders’ general
meeting, and make a report to the shareholders’ general meeting on the committee’s
income and expenditure, the business of the Company and the progress of the
liquidation not less than once a year. It shall make a final report to the shareholders’
general meeting when the liquidation is completed.
Article 253
The liquidation committee shall notify creditors within a period of 10 days from the
date of its establishment and publish at least three announcements of the liquidation in
a newspaper certificated by the CBIRC within 60 days.
Creditors shall, within 30 days since the date of receiving the notice, report their
creditors' rights to the liquidation committee, or for creditors who do not receive the
notice, within 45 days since the date of the first public notice. Where creditors do not
report their creditors' rights to the liquidation committee according to schedule, the
rights shall be deemed to have been waived by the creditors. When reporting creditors'
rights, the creditor shall provide an explanation of matters relevant to the creditor's
rights and shall provide evidentiary materials. The liquidation committee shall register
the creditors' rights.
In the course of reporting creditors’ rights, the liquidation committee shall not repay the
creditors.
Article 254
The liquidation committee shall exercise the following functions and powers during
liquidation:
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(1) to thoroughly examine the assets of the Company and prepare a balance sheet
and property list respectively;
(2) to notify creditors by a notice or public announcement;
(3) to deal with and liquidate relevant unfinished businesses of the Company;
(4) to repay all outstanding tax payment and the tax payment which arise in the
course of the liquidation process;
(5) to clear up claims and debts;
(6) to deal with the remaining assets after full payment of the Company’s debts; and
(7) to participate in civil litigation on behalf of the Company.
Article 255
After the liquidation committee has thoroughly examined the Company’s assets and
prepared a balance sheet and assets list, it shall formulate a liquidation plan and submit
such plan to the shareholders’ general meeting or relevant authorities in charge for
confirmation.
Payment of debts out of Company property shall be made in following sequence:
(1) liquidation expenses;
(2) wages owed to employees of the Company, labour insurance fees and
statutory compensation;
(3) outstanding taxes;
(4) discharging debts of the Company.
Company assets remaining after full payment in accordance with the provisions of the
preceding paragraph shall be distributed to the Company’s shareholders according to
the category and proportion of their shareholding. Distributions shall not be made to
the shareholders before the distribution of the Company's assets in accordance with the
above paragraph have been made.
During liquidation, the Company continues to exist but may not engage in business
activities which are irrelevant to the liquidation.
Article 256
If the Company is liquidated due to dissolution and the liquidation committee, having
thoroughly examined the Company’s property and prepared a balance sheet and
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property list, discovers that the Company’s property is insufficient to pay its debts in
full, it shall immediately apply to the People’s Court for a declaration of bankruptcy.
After the People’s Court has ruled for the Company to declare itself bankrupt, the
Company’s liquidation committee shall refer the liquidation matters to the People’s
Court.
Article 257
Following the completion of liquidation, the liquidation committee shall formulate a
liquidation report, a revenue and expenditure statement and financial account books in
respect of the liquidation period and, after verification thereof by an accountant
registered in the PRC, submit the same to the shareholders’ general meeting or the
relevant authorities in charge for confirmation.
Within thirty (30) days from the date of confirmation of the above-mentioned
documents by the shareholders’ general meeting or the relevant authorities in charge,
the liquidation committee shall deliver the same to the Company registry, apply for
cancellation of the Company’s registration and publicly announce the Company’s
termination.
Article 258
Members of the liquidation committee shall faithfully perform their liquidating duties
and conduct their liquidation obligations in accordance with the law, and shall not be
permitted to exploit their powers to accept bribes or other illicit gains, nor shall they be
permitted to seize the Company’s property.
Members of the liquidation committee shall bear the liability for damages suffered by
the Company or creditors due to their intentional or grossly negligent conducts.
Article 259
If the Company is lawfully declared bankrupt, liquidation shall be implemented
according to the relevant laws on enterprise bankruptcy.
CHAPTER 21: SPECIAL MATTERS IN CORPORATE GOVERNANCE
Article 260
When the chairman of the board of directors is unable to or fails to perform his/her
duties, the executive director acting as vice chairman shall perform such duties. When
the executive director acting as vice chairman is unable to or fails to perform such duties,
an executive director elected by more than half of the directors shall perform such
duties.
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When the chairman of the board of directors is unable to or fails to perform his/her
duties for a long term, by which the operation of the Company has been affected, the
Company shall elect a new chairman of the board of directors according to the
provisions of these Articles of Association.
Article 261
When the President is unable to or fails to perform his/her duties, a temporary person-
in-charge designated by the board of directors shall exercise power on his/her behalf.
When the President is unable to or fails to perform his/her duties, by which the operation
of the Company has been affected, the Company shall engage a new President according
to the provisions of these Articles of Association.
Article 262
The “governance mechanism failures” referred to in this chapter, shall include (but not
limited to):
(1) it is unable to form a board of directors for more than one year;
(2) there are conflicts among the directors of the Company for a long term which are
unable to be resolved through the shareholders’ general meeting;
(3) the Company is unable to convene the shareholders’ general meetings for more
than one year;
(4) a proportion specified by law or these Articles of Association cannot be achieved
on a poll taken at a shareholders’ general meeting and it is unable to pass effective
resolutions at the shareholders’ general meeting for more than one year;
(5) it is unable to pass the proposals for capital increase due to insolvency;
(6) other circumstances where the governance mechanism fails to operate which
result in severe difficulties of the Company’s operation and management or other
circumstances as decided by the CBIRC.
Article 263
Where there is a governance mechanism failure, the chairman of the board of directors
has the right to propose to the supervisory committee to investigate the Company’s
corporate governance mechanism, by (including but not limited to) direct engagement
of professional organizations such as an accounting firm, law firm, management
consultancy agency to carry out investigation of the Company’s corporate governance
mechanism, with the cost incurred borne by the Company.
The supervisory committee has the right to propose to the board of directors and
shareholders’ general meetings rectification solutions and disposition solutions in
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respect of the governance mechanism failures according to the investigation results, and
require the relevant parties concerned to carry out improvement and rectification.
Article 264
Where there is a governance mechanism failure and the internal corrective procedures
as specified in the Articles 263 adopted by the Company have failed to solve the
problem, the Company, shareholder individually or jointly holding no less than one
third of shares in the Company, or more than half of the directors are entitled to apply
for supervision guidance from the CBIRC.
Article 265
The CBIRC provides corresponding supervision guidance based on the specific
circumstances with respect to the governance mechanism failures. If material
governance risks are identified in the Company, and have seriously endangered or
threatened the lawful rights and interests of the insurance consumers or the safety of the
insurance fund, shareholders and the Company shall undertake to accept regulatory
actions taken by the CBIRC, such as the requirement of capital increase, restrictions on
shareholders’ rights and the order to transfer the shareholding held in the Company. In
serious cases, shareholders and the Company shall undertake to accept corrective and
takeover actions taken by the CBIRC against the Company.
Article 266
Shareholders shall undertake the obligations to assist the Company to improve its
solvency in case of insolvency of the Company. In the event of any of the following
circumstances, shareholders who are unable or refuse to increase their capital
contributions, shall agree that other shareholders or investors may increase their capital
contributions with reasonable scheme as a way to improve the solvency:
(1) the CBIRC orders the Company to increase its capital;
(2) the Company must increase its capital when its solvency cannot meet the regulatory
requirements after the attempt of other schemes.
CHAPTER 22: PROCEDURES FOR AMENDING THE COMPANY’S ARTICLES
OF ASSOCIATION
Article 267
The Company may amend these Articles of Association in accordance with laws,
administrative regulations and these Articles of Association.
Article 268
The Company shall amend these Articles of Association if:
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(1) there is an amendment of the Company Law or the Insurance Law of the PRC
or other relevant laws or administrative regulations, and items stipulated in these
Articles of Association are inconsistent with the amended laws or administrative
regulations;
(2) there is a change of the circumstances of the Company, and therefore a change
in the basic matters or relevant rights, obligations, responsibilities or rules of
procedures as set forth or stipulated in these Articles of Association;
(3) the shareholders’ general meeting has passed a resolution to amend the
Company’s Articles of Association;
(4) other matters that result in a change in these Articles of Association.
Article 269
The resolution passed by the shareholders' general meeting to amend the Company’s
Articles of Association shall be submitted to domestic company management
authorities, such as CBIRC, for examination and approval. Where amendments to
these Articles of Association involve the “Essential Clauses in Article of Association
of Companies Listed Overseas” (hereinafter referred to as “Essential Clauses”), it
shall, in order to be valid, be subject to approval of CSRC. Where the amendment
relates to matters of company registration, the registration shall be modified
according to law.
Article 270
The board of directors shall amend these Articles of Association in accordance with
the resolutions of the shareholders' general meeting to amend these Articles of
Association and the approval opinion issued by the relevant governing authority.
Article 271
The amendment of these Articles of Association is considered information that is
required to be disclosed according to the law and administrative regulations, and shall
be publicly announced in accordance with the stipulations.
CHAPTER 23: SETTLEMENT OF DISPUTES
Article 272
The Company shall abide by the following principles for dispute resolution:
(1) If any dispute or claim arises between a holder of overseas listed foreign shares
and the Company, or a director, a supervisor or other senior management of the
Company, based on the relevant disputes or claims in relation to the rights and
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obligations relating to the Company's affairs and as regulated by these Articles
of Association, the Company Law or other relevant laws, administrative
regulations, the parties concerned shall submit the dispute or claim for
arbitration.
(2) When a dispute or claim as described above is submitted for arbitration, such
dispute or claim shall be in its entirety, and all persons being the Company or
shareholders, directors, supervisors or other senior management of the
Company that have a cause of action due to the same facts or whose
participation is necessary for the settlement of such dispute or claim shall abide
by the arbitration. Disputes concerning the definition of shareholders and the
register of shareholders shall not be required to be settled by means of arbitration.
(3) A dispute or claim submitted for arbitration may be arbitrated, at the option of
the arbitration applicant, by either the China International Economic and Trade
Arbitration Commission in accordance with its arbitration rules or the Hong
Kong International Arbitration Center in accordance with its securities
arbitration rules. After the arbitration applicant has submitted the dispute or
claim for arbitration, the other party shall participate in the arbitration in the
arbitration institution selected by the applicant.
(4) If the arbitration applicant opts for arbitration by the Hong Kong International
Arbitration Center, either party may request for the arbitration to be conducted
in Shenzhen in accordance with the securities arbitration rules of the Hong Kong
International Arbitration Center.
(5) Unless otherwise provided by laws or administrative regulations, the laws of the
People’s Republic of China shall apply to the settlement by means of arbitration
of disputes or claims referred to in item (1).
(6) The award of the arbitration institution shall be final and binding upon each
party.
CHAPTER 24: SUPPLEMENTARY
Article 273
In these Articles of Association, association means the relationship between the
controlling shareholders, the de facto controllers, directors, supervisors, senior
management and the enterprises which are directly or indirectly controlled by the same,
and other relationships which may cause a transfer of benefits in the Company.
Article 274
In these Articles of Association, unless otherwise defined, “Stock Exchange” means The
Stock Exchange of Hong Kong Limited and the Shanghai Stock Exchange.
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In these Articles of Association, “CSRC” means the China Securities Regulatory
Commission.
Article 275
The board of directors shall be responsible for interpretation of these Articles of
Association.
Article 276
The term “accounting firm” as used in these Articles of Associations shall have the same
meaning as “auditor”.
Article 277
Terms of “not less than”, “within”, “not more than” used in these Articles of Association
shall include the number itself; while the terms “under”, “beyond” and “above” used
shall not include the number itself.
Article 278
These Articles of Association are written in Chinese. If there is any discrepancy between
this version and another version in different language or in other forms, the Chinese
version which has acquired the latest approval by and registered with the industry and
commerce registration authority shall prevail.
Article 279
The appendix to these Articles of Association shall include the Procedural Rules for
Shareholders’ General Meetings, the Procedural Rules for Board Meetings and the
Procedural Rules for Supervisory Committee Meetings.